Noted economist Dr Debapriya Bhattacharya has questioned key macroeconomic figures, saying various economic projections based on serious anomalies in data are leading to data anarchy.
He has also questioned the GDP growth figures as put forward by the finance ministry and the per capita income which has been shown to have overtaken that of India.
Presenting a budget analysis of the Citizen's Platform for SDGs, a coalition of several NGOs and representatives of the private sector, the platform's Convener Dr Debapriya on Sunday said the rise in per capita income during the Covid pandemic is incomprehensible.
Data provided by the finance ministry show per capita income in Bangladesh has increased to $2,227 in the current fiscal year from $2,064 last year. In his budget speech, the finance minister said the per capita income will rise further to $2,462 in the fiscal 2021-22.
"The 2020-21 fiscal year was weaker than the previous one and yet the budget estimates say FY21 was better. I question this assumption," he said.
Debapriya said, "The proxy indicators also tell a different GDP story. For example, how could public investment increase when annual development expenditure dipped seriously?
"The ministry has shown that public investment has increased to 8.2% of the GDP this fiscal year from last year's 88.1%. But, while ADP implementation was 74.9% last fiscal year, it is only about 50% until April this time, raising doubts about how much more could be implemented in the remaining two months of the financial year."
Similarly, private investment is shown to have increased from 23.6% last fiscal year to 24.2% this year. But contrarily, private sector credit growth decreased from last fiscal year's 8.6% to 8.3% as of April this year, he pointed out.
"At the same time, key indicators such as capital machinery import and Quantum Index of Industrial Production and underutilised electricity capacity have dipped."
In a sum-up, Dr Debapriya said the GDP growth rate of 6.1% in FY21 does not consider the second wave of the pandemic. As such, improvement in capital productivity is also not plausible.
Speaking about the proposed budget's poverty outlook, Debapriya said the 8th Five-Year Plan had projected hardcore poverty to reduce to 8.3% in 2024, but the budget documents think it will reduce at twice the rate to 4.5%. This, he said, has been done not taking into account the Covid situation.
Inconsistency in poverty target
Dr Debapriya Bhattacharya found a serious inconsistency in the budgetary target of the poverty alleviation.
He said the 8th Five-Year Plan estimated 23% poverty in the current fiscal year, slightly higher than 18.6% of the last one.
The plan sets a target to reduce poverty rate to 17% in FY22 but the finance ministry-set target is 12.3%.
"How will the ministry reduce poverty in Covid-19 crisis at a faster pace than the target set in the pre-pandemic time?" Debapriya asked.
"The budget has set a target to reduce extreme poverty to 4.5% by FY24, but the target in the 8Tth Five-Year Plan is 8.3%," he mentioned, making an observation that the finance ministry did not considered the job losses, new poor and other impacts of the pandemic at the budget formulation stage.
Since the new poor were not taken into account during the formulation of the budget, they have not been figured out in the proposed budget, he argued.
"Both the planning and finance ministries are providing their own data, leading to a data anarchy," he said, adding that robust data is a prerequisite to economic development.
Typical announcement on employment generation
The proposed budget has no innovative declaration on creating employment, Dr Debapriya Bhattacharya said. Employment remains in traditional training, internship and self-employment, he explained.
Half of the country's populations are youth and the poverty rate is highest among educated youth.
He identified some inconsistency in the budgetary targets and data in the field of employment and said the finance minister announced about 1 million of new jobs in the IT sector, but he did not say when and where the jobs were created.
Debapriya also pointed out that the government in the 8th Five-Year Plan set a target to send 6 lakh people abroad annually on an average in next three years, but the budgetary target is 21 lakh.
Will tax rebates generate employment or reduce prices?
Debapriya said the proposed rebate on taxes and VAT would support the manufacturing sector and boost production of imported subsidised domestic products.
He further added that job seekers and employees should benefit from the initiative through an increase in their wages and salaries. But the budget has no declaration to measure the issue.
"The government has failed to formulate a declaration due to absence of data," he observed, adding the BBS conducted a labour force survey in 2016 so the government has no proper information about the current job market situation.
Why the data gap?
Debapriya Bhattacharya blamed multiple agencies for the data disparity.
He said he found data on growth, per capita income and investment in four documents.
"There is a serious lack of capacity and initiatives at the Bangladesh Bureau of Statistics. Several non government agencies conducted significant studies on the impact of Covid-19 on people's lives and livelihoods, but the BBS has no research."
He said all of the government agencies are providing data to show their achievements and sometimes they are providing incomplete data.
Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the philosophy of the budget is to reduce inequalities in income, consumption and wealth. But, there are no visible measures to bring down inequalities, he observed.
He went on to say that complete and disaggregated data is required to evaluate the portion allocated for the marginalised people and the government is seriously lacking in this field.
Mentioning that businesses have been offered huge incentives in the proposed budget, he said the government should take proper initiatives to ensure redistribution of the benefit from these measures.
Dr Mushtaque Raza Chowdhury, convener of the Bangladesh Health Watch, praised tax exemption in the health sector in the proposed budget but expressed his discomfort over a low allocation in the sector.
Allocation for health in Sri Lanka is around four times higher than that in Bangladesh, he mentioned, adding in spite of low allocation, utilisation of resources in Bangladesh is low.
He stressed the need for undertaking proper initiatives to ensure transparency in health spending.
Rasheda K Choudhury, executive director of the Campaign for Popular Education (CAMPE), said education has been the most neglected sector in the proposed budget for FY22.
"I don't see any allocation for educational research. There was already inequality in the education system. But, this inequality is more evident, especially for the disadvantaged people, who cannot buy a digital device."
Advocate Sultana Kamal, core group member of Citizen's Platform for SDGs, chaired the virtual media briefing.
She said, "Our focus of the discussion was to concentrate on the implementation of this year's budget in connection to achieving SDGs."
"We have no proper data to evaluate our position in terms of achieving SDGs and where we are going," she added.
The government has allocated TK2,023 crore for 17 lakh people with disabilities, pointed out Shaheen Anam, executive director of Manusher Jonno Foundation. "What about the rest of the total 1.5 crore disabled persons?" she said.
Asif Ibrahim, chairman of the Chittagong Stock Exchange, said about 61.57% of the workforce lost their jobs in the pandemic and a few of them got them back.
He emphasised increasing private investment to create required employment opportunities.