Instead of creating an illusion amid covid-19-induced crisis, budget for the next fiscal year should reflect the people's needs with realistic and pragmatic programs and targets, economists said on Wednesday at a post-budget discussion.
The American Chamber of Commerce in Bangladesh (AmCham) organized the virtual meeting.
“The government has set a target to earn revenue of Tk378,000 crore in FY21, with around 56% growth estimation. There is a huge likely revenue shortfall in the outgoing fiscal year and the government is expected to earn Tk2, 50,000 crore in revenue this year,” said Ahsan H. Mansur, executive director of Policy Research Institute (PRI).
How the government could expect to achieve the 56% target at a time when the economic activities were going through a tough time amid covid-19 pandemic, said the economist.
“This is a fictitious target,” he added.
Nearly 50 lakh people lost their jobs due to the economic hit of the covid-19 pandemic and they did not know when they would be able to get jobs back, the economist said.
They needed cash and policy supports to survive, he maintained.
Commenting on the 8.2% GDP growth forecast, former Finance Advisor of a caretaker government AB Mirza Azizul Islam said it was impossible to achieve the revenue target in the next financial year.
“Financing the deficit budget is a big challenge, while high borrowing (Tk85,000 crore) will cast negative impact on private credit,” said Islam.
He suggested for cutting the non-development expenditure such as foreign trip by the government officials, with giving emphasis on spending for social safety net, farm mechanization and rural development.
Responding to the observations, Planning Minister MA Mannan said the government's target was to provide cash support to those who lost their jobs due to covid pandemic and fell below the poverty line as well as resuming the economic activities to recreate job opportunities.
“Although the reopening the economy was a risky decision, but some people back to work for the prompt decision. The new poverty arising from the pandemic is temporary and we are working to resolve the crisis,” said Mannan.
We thought the covid would disappear shortly but it had not happened, he said.
“We do not disagree about the challenges but we have bold steps to face it,” he said further.
“The epidemic has shown the weakness of Bangladesh’s health sector. The allocation proposed for the health sector is still much below than our expectation considering the gravity of the current situation,” said Syed Ershad Ahmed, President of Amcham.
“We are yet to learn more about the specific guidelines on the ‘mega plan’ for the sector. For instance, the deficiencies of the Institute of Epidemiology, Disease Control and Research have shown us once more how we could leverage from the investments in such fields and it applies to taking untapped opportunities in the field of economy as well,” he added.
“We certainly discourage the move to legalize the undisclosed wealth or money by paying a 10% tax which is unethical,” he observed.
