Economists say the key to economic recovery is bolstering the middle class
Although various social safety programs are set to be announced for the poor, there are no incentives for the middle class in the upcoming 2021-22 fiscal year budget.
According to Ministry of Finance officials, the budget will focus on covid recovery with a special focus on health, job creation, and the economy.
Talking to Dhaka Tribune, middle class and lower-middle-class groups urged the government to widen direct support and employment.
Meanwhile, economists opined that pandemic economic recovery will be hampered if the middle class is not protected in the long-term.
They said reducing inequality among people was a big challenge, as some got richer while others fell into poverty amid the pandemic.
According to economists, people with a fixed income, who work on a monthly salary, who have no extra income outside their salary, and those who live above the poverty line, excluding the upper class, are middle class.
In terms of salary, people earning between Tk40,000 and 80,000 are considered to belong in the middle class.
According to the Bangladesh Bureau of Statistics (BBS), the country's population is over 160 million. Of which, 40 million people or 25% of the total population fill the middle-class bracket.
A survey by the Center for Policy Dialogue (CPD), a private research institute, found that 62% of people lost their jobs due to the coronavirus outbreak.
Another survey conducted by the South Asian Network on Economic Modeling (SANEM), 42% of the population is now poor.
Sanjida Islam, from Azimpur area, said: “Commodities prices should be brought down with proper monitoring. With limited income in the capital, it’s difficult to support a family.”
“Due to the pandemic, my son lost his job. We are expecting a budget that would make our life easier and groceries prices to remain stable,” she said while talking about her budget expectation.
Grocery store owner Emdadul Hoque from the same area said: “The price of almost every single product goes up after the budget is announced. The government should consider the daily price of goods, especially onion, oil, and gas prices.”
A private school teacher Aminul Islam Bulbul said: “We are working to non-government schools and colleges are out of operation since last year, we want special support package for education.”
As many lost jobs while private tuition and coaching centres were closed for a long time, the government should allocate a supportive budget for teachers, he added.
Meanwhile, Saidur Rahman, a share market investor, said: “Corporate taxes in the capital market must be reduced so that new companies can enter the market and increase capital flow. That is my budget expectation.”
Street Hawker Babu Kumar Biswas, who sells mobile accessories at the New Market area, said: “Budget is only for rich people, who thinks about us? We just want three meals a day. Many times, I heard about cash support but have not received it yet.”
What experts say
Nazrul Islam, former economics professor at University of Dhaka (DU), said: “Middle-class people are too shy to ask for help. The government should realize the scenario considering the covid-19 situation. A total of Tk1,05,000 crore is being allocated in the social security sector in the budget of 2021-22 fiscal year but the middle class is out of that allocation.”
He said Thursday’s budget should be a budget for employment. Allocation for productive, social security and job creation projects should be increased by reducing expenditure in non-productive and unproductive sectors.
In addition, highest priority should be given to public and private investment, he further added.
The former caretaker government's financial adviser AB Mirza Azizul Islam said: “The condition of the middle class is woeful. Many people lost their source of income due to job cuts, some are getting half or less salary. There is not much to do in overcoming the situation.”
“For now, they need to be brought under the social security program. That's why we need to support people who have lost their jobs through the program,” he added.
Prof Mustafizur Rahman, distinguished fellow of CPD, said: "It will be difficult to promote employment without encouraging investment in the private sector. Many have moved from the service sector to agriculture. We have to bring them back into the industry.”
Our fiscal policy and development projects should be carried out in a way that the private sector gets encouraged in investment and employment, he added.
Professor Abul Barkat, president of Bangladesh Economic Association (BEA), said: “1% of people are on the list of super-rich. Due to the current pandemic, most of the remaining people have fallen into various levels of poverty. The rate has now tripled from the number of poor people. Another class has been created who are the neo-poor.”
Emphasizing the importance of the social safety program in the budget, he said: “There were two crore families eligible for social security. The number has now risen to 3.5 crores, which will increase further if the situation does not improve. That’s why we have proposed in the alternative budget to increase the allocation in this sector 7 times as compared to the current budget.”