Govt failing to spend when poor need more cash, food support

Strong administrative monitoring and institutional reforms are necessary to ensure the spending of public funds allocated for the disadvantaged, experts have said.

The government spent only 43% of Tk2,500 crore meant for free food distribution. And 35 lakh people received Tk2,500 in cash support each, though the target was 50 lakh, said Debapriya Bhattachargya, convenor of Citizen's Platform for SDGs, Bangladesh, at a virtual media briefing on Sunday.

The funds for the poor were far from adequate to help them cope with the pandemic, but that too have not been spent. The crisis that they are facing will deepen if they do not get government support, giving rise to malnutrition, extreme poverty and indebtedness, the organisation said.

Stakeholders should be engaged in implementing the support schemes, it added.

Economists and experts in different sectors said the need of the lower tier of the population should be considered while formulating the budget for the fiscal year 2021-22.

Debapriya presented the keynote paper, with advocate Sultana Kamal in the chair.

"Last year when the coronavirus struck the country, we said 'we do not have money'. Now, the concern is not the unavailability of money, rather it is the inefficiency and incapacity to spend the fund," Debapriya said.

The government has to focus on consumption, investment, public expenditure and net export to ensure consumptions by low-income people and employment generation at small and medium enterprises, he said.

In the keynote paper that highlighted the budget deficit, the Platform recommended increasing the tax-GDP ratio by 0.5-1 percentage points a year to bring it to 15% in five years.

Debapriya said revenue collection until March was 50% of the target set for FY 2021 and the implementation of Annual Development Programme was 42%.

Taxes should not be increased in the next fiscal year. Instead, administrative capacity should be strengthened to increase revenue collection, he said.

Labour-intensive sectors should get tax benefits, Debapriya said. Moreover, the provision to allow investments of untaxed money should be removed, regular tax payers should not be harassed and tax cases should not be filed for political harassment.

On revenue expenditure, the paper said increasing the pace of development budget implementation and suspension of mega projects, other than those nearing completion, were necessary.

Cash and food support should be raised to 0.5% of the GDP, social safety net should be expanded and the public health expenditure should be hiked to 4.5% of the GDP.

Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, said Covid-19 had broadened inequalities in terms of income, wealth and consumptions.

"In one year, the price of rice went up by 20% but people's income fell. Poor people became poorer. A section of these people needs targeted support."

  There should be a separate budget for children who are confined because of the pandemic, Mustafizur said. Money should be allocated for health safety of factory workers as well, he added.

Citing that the education sector is neglected, educationist Rasheda K Chowdhury emphasised the importance of incentives for education.

"Inequalities in education have been widening during the pandemic. Child labour and early marriage are rising."