The Financial Express

Addressing both macro and micro economy

Published: April 07, 2020 21:39:23 | Updated: April 10, 2020 20:55:57

Addressing both macro and micro economy

The stimulus package announced by the Prime Minister on April 5 targeting mostly the macro economy is no doubt timely to help the economy ride out the prevailing standoff because of the lockdown and its fallout in the days ahead. Although a good deal of the government's intent depends on successful implementation of the package, particularly availability of enough money with the banks and bank-client relationship to facilitate businesses with low rate of lending, it is crucial to put in all efforts so that the scheme turns handy within the shortest possible time.

Alongside this macro-level package, temporary measures including  feeding a large number of people all over the country in both urban and rural areas are now more crucial than perhaps ever in the recent past. What is fast emerging is a depressing scenario where most low-income earners need money to buy food and bare necessities and  the poorer sections in the informal sector with no income whatsoever are in dire need of at least two meals a day to survive. Temporary though, this at the moment is the most needed task and despite its being challenging for the government, things must roll fast to save lives. Hunger and deaths from starvation may assume a scarier proportion than Covid-19. Around 52.0 million or 85 per cent of the workers in the country are depended on various informal economic activities, most all of whom are now without work.

Some measures are in place. The Prime Minister in her address to the nation has reiterated the government's earlier announcement to gear up Open Market Sale (OMS) of rice at a subsidised price of Tk 10 a kg in an effort to help the poor during the shutdown period. The operation that has started from April 6 allowing one person to buy up to 5kg of rice once a week is too limited as a starter as it is confined only to a few locations in the capital. Although the authorities are to commence similar operations outside the capital -- in districts and upazilas, it is still not certain when those will start.

The government has allocated 8,450 tonnes of rice and Tk 40.7 million as relief for the poor. The disaster management and relief ministry has reportedly sent the aid package to deputy commissioners in all 64 districts. Earlier, the government provided Tk 110.24 million and 39,667 tonnes of rice in two phases to assist the poor during shutdown. These efforts which many believe are yet to roll out seem far too inadequate. There is thus a definite need to substantially expand the social safety net programmes. The budgetary allocation for social safety net is Tk 143.73 billion in FY20 which is around 3.0 per cent of the national budget. It is now important to assess the needs to examine how much can be met from the budgetary allocation, and also, whether any effective device other than those in practice could be worked out to speedily transfer food and cash to the poor across the country.

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