The proposed budget for fiscal year 2020-21 could not properly address the urban poor, nor announce any measures for the youths and small and medium enterprises (SMEs) to survive Covid-19, the South Asian Network on Economic Modeling (Sanem) said on Saturday in a webinar.
Dr Sayema Haque Bidisha of Sanem said that the budget does not address the floating urban poor, while the measures taken for youth and SMEs is not enough. Bureaucratic complications often stand in the way of these measures, which should be taken into consideration.
She also said that despite incentives and stimulus packages for the RMG sector, workers have been laid off. The budget does not contain specific and definite measures for women, especially for those distressed by the current crisis.
Urban poor and slums dwellers have been hit hard by the shutdown to stop spread of Coronavirus as they lost the means of earning.
As a results, thousands of people fallen in poverty, while the SME sector suffered a lot caused by shutdown during Eid and Pohela Boishakh.
As per the forecast by the researchers and the think tanks, the country’s poverty may move to 35%.
The government will not be able to pull off its targets on GDP growth and revenue mobilization for fiscal year 2020-21, as they are unrealistic amid the coronavirus pandemic, the think-tank also said.
On Thursday, Finance Minister AHM Mustafa Kamal tabled a national budget of Tk568,000 crore for the 2020-21 fiscal in the parliament.
Sanem Executive Director Prof Selim Raihan said: "Targeting an 8.2% growth rate of GDP in the next financial year raises the question of whether it has already been assumed that economic activities will soon return to normal and economic growth will resume its previous trend.
For financing, it must be realized that the revenue target is unrealistic and therefore it is necessary that Bangladesh enters into negotiations with the World Bank, IMF, and other international organizations for low interest loans with flexible conditions, he said.
Prof Raihan also said the proposed budget was not "Covid-19 responsive" to the extent that it needs to be.
Referring to the whitening of black money, Dr Raihan said that while this measure has not been effective in the past, it also discourages honest people.
The revenue collection target for the coming fiscal year has been set at Tk 378,000 crore.
Of the amount, the NBR has been tasked to realize a revenue target of Tk330,000 crore, the non-NBR revenue collection target being Tk15,000 crore, while the non-tax revenue collection target is Tk33,000 crore.
Selim Raihan said: “I do not think that the huge revenue target proposed for the next financial year is realistic.
“The budget deficit might increase in the coming days, especially if the revenue target is not met,” he added.
“If the revenue target is not met, how will the increased allocation for health, social protection, and education be funded?” he questioned.
Prof Raihan explained that the budget focused on the RMG sector too much and other export-oriented sectors were not given equal importance.
Reflecting on the banking sector crisis, he remarked that banks will face the dual burden of financing both stimulus packages, and the budget.
The pandemic has created new challenges in the education sector and the budget allocation reflects traditional thinking which cannot address these new challenges, said Sanem research fellow Mahtab Uddin.
