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The Financial Express

New reality absent in budget

| Updated: June 09, 2021 22:15:10


New reality absent in budget

The annual budget for 2021-22 has been placed by the finance minister in parliament in the wake of a second wave of Covid-19 pandemic across the country. But questions are already being raised by critics on whether it reflected the reality of the pandemic situation and whether it would be able to adequately address the crisis. Usually, a gap remains between the formulation and implementation of any budget, and the figures shown often remain on paper only. This year is no exception. Although there had been demands for enhancing the budgetary allocation for the health sector last year for tackling the pandemic, even that money has not been spent during the current financial year. Moreover, a sizeable proportion of the country's households could not cope with the first wave of the pandemic, as both their incomes and savings plummeted. Now, an even larger segment of the population lacks the capacity to tackle the risks associated with the second wave. As a result, poverty and inequality have been constantly exacerbating in the country.

In the above backdrop, the Taka 6036.81 billion budget announced by the finance minister seems to have been a routine exercise that lacks any direction for overcoming the calamity, and also appears to be unrealistic to many observers. As usual, economic growth has been attached top priority instead of the mundane travails faced by the common people. The finance minister spoke about protecting and bringing a balance between lives and livelihood. The corporate tax for businessmen has been reduced again and some additional incentives have been offered to the industrialists, which would certainly help the flourishing of industries, trade and commerce. These in turn have endowed the budget with a business-friendly character. The allocations and coverage of social safety net programmes have also been enhanced. But there is nothing in the budget for those who have slipped below the poverty line or lost jobs due to the impact of the pandemic. As a result, a significant segment of the country's population, including the new poor, remains outside the purview of the announced budget.  

The finance minister has also emphasised  agricultural development, but the subsidies offered to the sector are quite inadequate compared to actual need. Similarly, although allocations have been raised slightly, there is no direction or guidance on confronting the challenges faced by the education sector, which has almost remained in limbo during the past one and a half years. Besides, the imposition of 15 per cent tax on private educational institutions would only squeeze the educational opportunities of the new generation, in addition to throwing many institutes out of circulation. The educational arena has undoubtedly been one of the hardest hit sectors during the pandemic.

Although the finance minister has made comparatively higher budgetary allocation for the health sector, there is no guarantee that the allocated money would be spent properly for the good of the masses. Past experiences show that such allocations could not be properly spent in the sector due to rampant corruption and irregularities, as well as absence of accountability. The finance minister has spoken about bringing 100 million citizens under the purview of Covid-19 vaccination. But if his formula of vaccinating 2.50 million people per month is applied, then it would take years to complete the vaccination process. Economic disparity has been another feature that has been hounding Bangladesh over the past fifty years. But there is no direction in the budget speech for reducing that disparity. Rather, more oil has been applied on oily heads instead of paying more attention to the 'have-nots' in society.

Overall public expenditure has declined during the current fiscal year compared to the previous one even in the midst of a pandemic. Despite increased liquidity, the credit-flow has not increased. The credit-based incentive packages announced by the government did not reach the most vulnerable and weaker segments of the economy as targeted mainly due to dearth of institutional capacity. Besides, the sectors that employ a majority of the labour force have remained outside its coverage. The affluent sections mostly benefited from the government packages, leading to further concentration of wealth and worsening of the inequality situation.  It was expected that the finance minister would attach due importance to the common people by prioritising relief and rehabilitation, as well as recovery and reconstruction in order to curb the downward spiral of the economy. The finance minister himself has said that this budget would be for the common people and the concerns for lives and livelihood would dominate its agenda. But unfortunately, the announced budget has failed to reflect that claim.

It is sad that the people of this country still have no effective control over the budgetary process even after fifty years of Bangladesh's existence. The whole budgetary exercise appears to be strictly under the control of the executive branch of the state with bureaucrats playing a major role. As no discussions are held on the supplementary budget, it cannot be known why the original budget could not be implemented as per plan. There has been a chronic absence of supervision and accountability in the financial system, which might have been the result of an ongoing democratic deficit. Consequently, the aspirations of the common people are not reflected in the budget documents.  

The information and data presented in the budget are often found to be inconsistent in Bangladesh, as numerous statistics are not updated regularly. In the absence of a specific framework and plan for overcoming the crises faced by the nation, the budgetary process has assumed the character of a routine exercise that remains conservative and mostly caters to the interests of the vested and powerful groups wielding disproportionate influence on governance. Most countries of the world are now stressing expansionary policies for tackling the scourge of Covid-19 pandemic. But ironically, the budget framed and presented in the golden jubilee year of Bangladesh's independence has failed to address even the barest incremental needs of the commonest people.

 

Dr Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly. Email: [email protected]

 

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