The Financial Express

Priorities in budget FY21 well identified

Challenges lie on allocation and implementation

| Updated: June 29, 2020 21:34:32

Priorities in budget FY21 well identified

In the proposed budget of FY21, the Finance Minister started with the promise of high hope despite the current unprecedented crisis due to Covid-19. Priority sectors have been rightly identified.  Health sector has been given the highest priority, followed by agriculture, social safety net, job creation and rural development and implementation of various fiscal and stimulus programmes. Notwithstanding various initiatives, the proposed budget still looks like a traditional one in terms of allocation of resources and identification of implementation strategy. Innovative strategy is absent as per the expectations emanating through the exigencies of the ongoing pandemic. It is not clear how the proposed budget will facilitate economic recovery and protect lives and livelihood from the adversities of the pandemic. The proposed budget outlay is  Tk 5.68 trillion with an ambitious Gross Domestic Product (GDP) growth target of 8.2 per cent for the next year. State below are some observations on the budget:

Firstly, GDP growth rate has not been targeted realistically, which may provide a wrong message to the world forums as Bangladesh needs assistance from the development partners. Even in a business-as-usual situation, it would be difficult to attain such a high GDP growth rate. It is also almost impossible in this hard time as many people are losing employment with a backslash in RMG sector. Exports and imports are declining since March 2020 and the remittance is in great agony, too. In addition, there is absence of strong domestic demand, which has been the main driver of high GDP growth rate in the past. In FY20, the rate of growth would be around 1.6 per cent, as the World Bank predicted. As a result, Bangladesh's growth in statistics has skyrocketed as always, while the Covid-19 epidemic has shown that these claims are not realistic.

Secondly, health sector has been identified as the most important sector in the proposed budget though it is not reflected in the budget allocation. As mentioned in the budget speech, allocation for health sector is 7.2 per cent of the total budget and 1.3 per cent of the GDP, which is far below the expectation (4 per cent of GDP in the health sector as recommended by World Health Organisation). Even there are some ambiguities concerning this allocation as it consists of the health-related expenditures of 13 ministries. Health ministry will get only 5.1 per cent of total budget and 0.9 per cent of GDP. In addition, a block allocation of 10,000 crore has been kept separately to fight Covid19. The corona fund is a good initiative by the government but there exists concern over its implementation. There is no proper guideline and roadmap on how to use this fund effectively. This amount can be used for any activities related to pandemic by various ministries.

It is understood from the ongoing pandemic how vulnerable our health sector is, which needs drastic reforms at the primary, secondary and tertiary levels. It was mentioned in the budget to modernise 2000 existing community clinics out of 13,812, which is much appreciated. It is expected that the rest of the community clinics will be covered gradually. But modernisation is a relative term. Access to basic health services for all citizens is a constitutional right. Universal health coverage with health card for all citizens is a public demand for long. Community clinic - known as pro-poor health initiative -- particularly in the rural areas can be the starting point for development of the health sector with physical infrastructural development, availability of qualified doctors, trained nurses, safe delivery options, basic diagnostic facilities, and referrals to specialised doctors. This would minimise a lot of urban migration for healthcare services and thus, people living in rural places would have a sound primary healthcare facility. As mentioned in the budget speech, Community Clinic Health Assistance Trust Act, 2018 has been approved and a trust has been established. Activities under this trust should be implemented immediately. In the long-term, the authorities should pay attention to establishing upazilla centric modern hospitals. We have a very good civil administration at the upazila level implementing development activities at the grassroots level. Capacity of Upazilla and district level hospitals should be significantly enhanced with adequate Intensive Care Unit beds and ventilators to fight the deadly disease.

Modern community clinic services should be expanded at the ward level in urban areas so that urban poor and low income people could benefit. In urban areas most of the hospitals and clinics are privately ownwd and thus low-income people cannot afford to seek healthcare services from them.  If the public hospitals are established following zone-specific decentralisation strategy, the government would be more successful in fighting any disease outbreak while the citizens, especially the urban poor will have greater access to healthcare services. It, however, requires perfect harmony of the public and private sector hospitals with strict monitoring of the private hospitals, clinics and diagnostic centres by the government.

Thirdly, education sector is not listed in the top most prioritised sectors, which should have been on top five. We have been demanding separate education budget for long but for unknown reasons government prepared Education and Technology budget together. We do not see pandemic-induced education budget. Education received 11.69 per cent of the total budget and 2.09 per cent of GDP. Almost the same budget was allocated in the ongoing financial year. As a signatory of UNESCO, Bangladesh should have an allocation 20 per cent of the budget and 4 to 6 per cent of GDP for education sector. National Education Policy 2010 also focused on this, although the real scenario has not changed. No specific budget has been allocated to enhance digital competency of the educational institutions, teachers and students. We should also prepare ourselves for online teaching and learning. The decision of increasing surcharge on internet use and mobile phone use is absolutely contradictory with the government's 'digital Bangladesh slogan' and response to ongoing pandemic circumstances. In addition, government should allocate budget to reduce drop out rate of the students due to the pandemic, and soft loan with zero interest rate should be provided to the students to purchase smart phone, laptop and internet data. All the educational institutions should be brought under high speed internet connectivity across the country. Each institution both at primary and secondary level should be provided with adequate number of laptops and multimedia projectors along with setting up of ICT labs. In addition, government should allocate budget for masks, liquid hand soap, sanitizer for the educational institutes with clean water supply and sanitation. It is very much appreciated that the cabinet has approved National School Meal Policy 2019 to roll out midday meals to all primary schools across the country. The Finance Minister put particular emphasis on the quality of education and research in higher education but no specific initiatives and budgetary allocation were kept for this. 

Fourthly, social safety net has been allocated 16.83 per cent of the budget and 3.01 per cent of the GDP. It is appreciated that the number of beneficiaries under social security programmes increased to almost 10 million with around 11 million new beneficiaries including all poor senior citizen and widows and women deserted by husbands in 100 Upazilas as well as insolvent persons with disabilities. It is expected that such initiatives will be expanded to all Upazilas, municipality and city corporation areas in the future. It is estimated that poverty rate has gone up recently to 35 per cent, around 60 million people have become poor due to the adversities of the current pandemic situation. The government scheme of providing cash support of TK 2500 to 5 million poor families is praiseworthy but it needs to be continued for more months as the destruction of COVID 19 is continuing. The newly created poor and returnee poor migrant workers should be included in the cash support programme. In addition, existing allowances should be increased to at least double for another 3 to 6 months. The stimulus package of Tk. 103,117 crore (3.7 per cent of GDP), which is the second highest among peer countries, should be implemented immediately so that target groups including SMES, women-led SMES (both formal and informal) could avail themselves of the benefits to face the challenges of the pandemic.

Fifthly, agriculture sector has been given proper attention. To help the farmers, the government can directly purchase products from the field during harvesting period to ensure that the farmers get appropriate price of their products. Establishment of more cold storage at the upazilla level would have been mentioned in the budget as it would further help foster food security across the year.

Allocation is not enough. It is required to ensure value for money, effective utilisation of resources, quality expenditure and good governance at all levels. We need to make concerted efforts to rise to the challenges of the ongoing pandemic so that our lives and livelihoods return to normal as soon as possible. It is important that the government rethink some budgetary allocations during budget discussions of parliament to be able to address the needs of the people hit hard by the pandemic.

Dr. M. Abu Eusuf, Professor, Department of Development Studies and Director, Centre on Budget and Policy, University of Dhaka & Executive Director, Research and Policy Integration for Development (RAPID).

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