The Centre for Policy Dialogue (CPD) on Thursday said the upcoming national budget for 2021-22 should highlight several areas including ensuring better health facilities for Covid-19 patients and enhancing social safety net programs for poor, new poor, and marginalized people.
Besides, the allocation must be raised for employment-enhancing infrastructure development projects and supporting agriculture, SMEs, and export-oriented industries for their recovery and thereby keeping the existing jobs should be emphasized in the upcoming budget.
These suggestions were presented by CPD Senior Research Fellow Towfiqul Islam Khan in a webinar of CPD Media Briefing on Recommendations for the National Budget FY2021-22.
Towfiqul Islam said the FY22 budget will need to address the weak performance of FY21 budget implementation, the persistence of adverse impacts of the first wave of Covid-19, continuing stagnation in private investment, the second wave of the Covid-19 pandemic, and failure of the external sector to pick-up as also the medium-term fiscal reform issues with a view to making a recovery sustainable.
“The budget for FY22 needs to give equal importance to receiving funding opportunities and ensuring proper use of the funds. Besides, the revenue mobilization strategy should be designed in a realistic manner, readjustments in tax provisions, enforcement of tax measures and curbing tax evasion. And implementation of medium-term reform plans should receive high priority,” he added.
Towfiqul said as the country is passing through the second wave of the pandemic, the policymakers, once again are posed with the challenge of maintaining a balance between the lives and livelihoods.
The official GDP growth of 5.2% in a pandemic year was not so unsatisfactory, particularly because almost all other countries have experienced much lower if not negative growth. The government had projected a growth rate of 7.4% for FY21, which was a highly optimistic projection.
“CPD reiterates the need for an expansionary macroeconomic stance in the budget for FY22 which accommodates the needed additional public spending. The government should put more effort into higher foreign aid to underwrite the fiscal deficit. Increased budget deficit should be justified by prudent reallocation and re-prioritization of public expenditure needs in FY22,” he also added.
In view of Bangladesh’s LDC graduation in 2026, obligations and compliance requirements as a developing country should be identified, and gradual reforms in the taxation system should be put in place.
CPD would like to recommend that NBR introduces taxes for proxies for pollution, by tax region, in alignment with what was mentioned in the “Public Financial Management (PFM) Action Plan 2018-2023 to implement The PFM Reform Strategy 2016-2021” Towfiqul said.
He added that the provision of whitening of black/undisclosed money facility through voluntary disclosure of undisclosed income should be discontinued in the budget for FY22.
CPD Distinguished Fellow Professor Mustafizur Rahman said during the first wave of the Covid-19, they stated poverty rate increased 35 percent from 20 percent due to the pandemic. So, each poor family should provide Tk8,000 in two times a year.
“If we kept Tk30,000 crore, then it was 1 percent of our GDP. Actually cash transfer is a suitable way to assist the poor during the pandemic. We have to emphasis on revenue collection otherwise how the government will assist people,” the economist also said.
Mustafizur said reducing corruption and ensuring transparency in all sectors in the country is the most important during the disaster.
CPD Research Director Dr. Khondaker Golam Moazzem said the government has taken different programs to assist people those really appreciable.
“But, someone takes the assistance several times and someone does not get that. In this context, the government can support from different NGOs who are working with slum dwellers and other poor for proper distribution,” he also said.
