What economists expect from next budget
Budget
Health budget needs to be increased
Dr AB Mirza Azizul Islam, former adviser to the caretaker government on finance
The government should increase budgetary allocation for the health sector to ensure universal health coverage for the country people. And crises of medical equipment have to be removed. More poor people - who went under the poverty line - have to be brought under the social safety net to help them come out of poverty. The government needs to spend on socio-economic security, moving away from financing the projects which are not on the list of priority. To meet deficit financing, money from the Bangladesh Bank and external sources must be ensured rather than resorting to bank borrowing.
Health sector needs to be streamlined
Ahsan H Mansur, executive director of Policy Research Institute
Only increasing allocation for the health sector is not enough, it is also essential to streamline the sector with strong hands to get optimum benefits. The government needs to take stringent measures to ensure healthcare in hospitals.
Even if the government tries to revive the economy, it will not be able to do that thoroughly. The factories will not be fully-operational because of coronavirus fears. There will be no new investments. There will be many more lay-offs in apparel and SME sectors, and they will remain unemployed for a year or two. We have to provide food assistance to them.
The government should emphasise increasing both local and foreign investments in the country to implement its bailout packages worth Tk95,000 crore announced to revive the economy. At least some investments which are about to be transferred from China need to be brought to the country.
It is essential to start wide-ranging reforms in the revenue sector from the next fiscal year.
Retain employment to ensure income security
Dr Zahid Hussain, former lead economist of the World Bank's Dhaka Office
We have to build improved infrastructure and skilled human resources in the future for the health sector. But the emergency allocation is required to provide treatment for both coronavirus and other patients.
The government will be responsible for the large number of people who have lost their jobs and their income due to the Covid-19 pandemic and would need a lot of money to sustain their lives. In this case, social security will be in priority after the health sector.
It is also necessary to increase the efficiency of market management and government stock management. Infrastructure also needs to be built in this sector. And to ensure income security, it is crucial to retain employment. Allocation for skill development should be increased for education.
Next budget should be formulated as an action plan to deal with pandemic effects
Dr Salehuddin Ahmed, former governor of Bangladesh Bank
The next budget has to be formulated as an action plan to weather the coronavirus fallout, it should not be a conventional one. The damages the Covid-19 pandemic did to the country's economy and health sector cannot be set right in one budget only. However, adequate measures have to be taken in the next budget as well to recoup the losses. Universal health insurance can be introduced from this year.
The health sector has to be kept under the control of the government without going for privatisation.
Additional allocation should be set aside for employment generation in the private sector. Corruption and waste of money must be stopped during the implementation of the budget.
Salaries and allowances and other benefits of government employees have increased a lot. They are now in better financial conditions compared to the private sector employees. There is no need to raise any benefits only to make government employees happy.
This time the government will not be able to take too many loans from banks to meet the budget deficit. So, to save spending, it would be wise not to allocate funds for long-running projects, including those for setting up more power plants.
Private sector should get more priority
Dr Mustafa K Mujeri, director general of Bangladesh Institute of Development Studies (BIDS)
There must be emergency arrangements in the upcoming budget to compensate for the economic damages caused by coronavirus. More importance should be given on incentives for the private sector to keep the economic wheel moving.
Production in the private sector has collapsed, and supply chains snapped. We need to identify the problems in the private sector and help to overcome them. In this case, corporate tax can be reduced even if it is for even a temporary period.
Apart from retaining jobs in service and industrial sectors, the government must create new jobs for those who have fallen below the poverty line because of coronavirus.
We have to get out of a traditional budget structure and make a new kind of budget. There should be sufficient flexibility in the budget so that it can be changed depending on a changing situation.
Health, education should get highest allocations
Dr Shamsul Alam, member (senior secretary), of General Economics Division (GED), Planning Commission
The country is having to spend a lot of money to ensure healthcare. Businesses are going through a tough time. Export and import activities have nosedived, so have remittance inflows. Consequently, the government's revenue collection will fall. Around one crore people in the informal sector are now jobless. No one knows how long the coronavirus will last.
Despite so much uncertainty and pressure, the highest allocation should go to the health sector. After that, the education sector will be in priority.
There is no alternative to a skilled workforce to reconstruct the economy in the post-pandemic time. So, we need to enhance the allocation for this sector, given its importance.
It will be very tough to import food in the future. In this situation, we have to develop a machine-based agricultural system. Fair prices of agricultural produces have to be ensured to encourage farmers for production. Food procurement at the government level should be increased. It is also essential to ensure proper marketing of agricultural produces.
Reforms in revenue sector should start from next fiscal year
Professor Mustafizur Rahman, distinguished fellow, Centre for Policy Dialogue
It is essential to start the reforms in the revenue sector, including an amendment to the income tax law, from the next fiscal year to rein in tax evasion.
The additional allocation should be given to health, agriculture and social security. There are many projects which will not face any problem if their implementation is delayed or slowed down. Notably, there are several ongoing projects in the power sector, the implementation of those can be postponed and the money can be spent in other sectors.
Increasing revenue should be main focus of next budget
Dr Mohammad Tarek, former secretary to Finance Division
Increasing revenue should be the main focus of the next budget. Revenue collection must be increased to 13 percent of GDP next year. Therefore, tax evasion has to be stopped. The second priority should be to ensure the proper use of resources. We need to introduce a strong monitoring system for that. Increasing allocation for the health sector and utilising them properly must be to the third priority in the upcoming budget. It is time we reorganised our health and education systems.
The development paradigm has changed at this time of coronavirus. People's welfare, hunger, environment, education and health are in the centre stage of development. Then comes growth and per capita income. If not in the next fiscal year's budget, it will have to be reflected in subsequent budgets.
It is also very urgent to take initiatives for improving the quality of government spending. There are over 1000 projects in the annual development programme which are unnecessary and these must be dropped. Government officials need to rationalise the use of vehicles and foreign tours. We have to ensure transparency of every penny.
A large number of jobless workers in the informal sector should be identified and given minimum financial assistance. In the next fiscal year, it would be appropriate to increase the amount of financial aid to the poor families under the social safety net programmes.
Funding needed in social security sector to continue money flow for the poor
Dr Selim Raihan, Professor, Department of Economics, University of Dhaka and executive director of SANEM
It is time we restructured the economy – we have to shift from the cheap labour dependent economy to the skill and technology-dependent one. But firstly, the people of the country must be kept alive. The health sector should get the highest allocations in the next budget, keeping this in mind.
A lot of money has to be spent on the treatment of Covid-19 and non-Covid-19 patients. Food is most needed to survive. Apart from ensuring food production, it should also be made available for all. Adequate funding is needed in the social security sector to keep money flow on for low-income people.
Government should allocate enough to develop skilled health workers
Dr Nazneen Ahmed, senior research fellow, BIDS
The government must prioritise the health sector at the top of all others. Only increasing allocation for infrastructure and other equipment will not be sufficient without emphasising increasing quality of service delivery. The government should allocate enough funds to develop skilled manpower for healthcare service.
It will be challenging to create new jobs in the near future. Even the protection of existing employees would be tough. The government should provide financial and policy supports for the private sector to protect jobs. There should be enough allocation to provide education and proper skill training for human resources.
The informal sector has released a lot of employees. The government should provide an allocation to help the jobless and minimum-income level people for their survival. Cash support from the government could help maintain their purchasing power and boost aggregate demand, which will help to recover the economy.
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