Doesn’t seem like a Covid-19 budget: CPD says

Terming the proposed budget for 2020-21 fiscal year an "as usual budget", Centre for Policy Dialogue (CPD) said an innovative Covid-19 budget was needed to address the economic recovery amid the pandemic.

The budget for FY21 has to be looked through not only the economic lens, but also health, humanitarian and social lenses, said Fahmida Khatun, executive director of the think tank, while presenting a paper in an online press briefing today.

The economy of Bangladesh, from the very beginning of the ongoing fiscal year, has been grappling with formidable challenges which have been exacerbated by the outbreak of Covid-19 pandemic, she said.

"However, the impacts of the Covid-19 pandemic have been largely ignored," she added.

CPD had repeatedly stressed that GDP growth rate should not be the anchor for economic policies, including the national budget, in the current context.

Instead, focus should be on saving lives and reducing the vulnerabilities of marginalised groups, particularly against the backdrop of the pandemic, she pointed out.

"The budget did not try to get out of 'GDP growth' centric philosophy and focus more on poverty, inequality and employment. In many senses, the budget cannot be utilised."

It is thought that a 125.2 percent increase in private investment will be attained in FY21 via a private sector credit growth of 16.7 percent.

Growth target for export has been set at 15 percent though both RMG and non-RMG exports are in troubled waters.

Remittance growth target has been set at 15 percent but it may be hit hard due to job losses in host countries, lower outbound remittance from GCC countries due to Covid-19, oil price slump, various restrictive measures and stringent health related conditionalities in host countries.

The proposed budget will worsen inequality as the proposed budget reduced tax for wealthy people, along with lower income earners.

For the health sector development budget allocation increased by only 1.90 percent, whereas non-development budget allocation increased 24.37 percent.

Budget allocation for health has been less than one per cent of GDP for the past 12 years indicating that healthcare was never a priority sector for the government; in 2017 at least 30 LDCs spent more than one per cent of GDP on health.

Surprisingly, even the Covid-19 pandemic was not reason enough for the government to prioritise the healthcare sector in FY21.

"The government appears to have prepared the budget under the assumption that the fallout from Covid-19 will be managed in a very short period, and the economy will bounce back in FY21," she said.