Experts call for measures in the budget to help the new poor

The proposed budget allocation for the social safety net will protect people who are already poor and marginalised. But the government should have allocated funds for those who have recently become poor due to the Covid-19 crisis, especially in urban areas, said experts.

"Preparing a list for the newly impoverished is very urgent. This list should be made quickly with the help of local government, research institutes, and non-governmental organisations," said Dr Atiur Rahman, former Governor of Bangladesh Bank, at a virtual press conference organised by research organisation Unnayan Shamannay on Saturday.

"At the same time, it is possible to identify the new poor over a helpline. A database can be set up by launching this helpline to provide a place for those who are losing their jobs," he said.

He said the allocation for social security has increased with the budget allocation for pensions being added to the social security budget. The allocation for pensions would not have been added to the social security sector if a separate pension authority were there.

He also demanded a universal pension scheme and universal health insurance.

Dr Atiur Rahman continued that if the Covid-19 situation draws out, it may be necessary to increase allocations in the social security sector. The government needs to be prepared for this.

He said, "Without making structural changes in spending the health sector budget allocation, simply increasing budgetary allocations will not bring benefits. It would be very effective if government took responsibility by introducing health vouchers for the segment of the population availing health care in the private sector."

Last April a survey by the Power and Participation Research Center (PPRC), and the Brac Institute of Governance and Development (BIDG), found that 2.45 crore people have been newly impoverished during the Covid-19 crisis.

According to the Bangladesh Bureau of Statistics (BBS), the country's poverty rate fell below 20% in 2019 before Covid-19 struck. At that time about 3.5 crore people were living below the poverty line.

The industry friendly and business friendly revenue policy in the proposed budget will create employment opportunities. This will make it possible to achieve the 7.2% government growth target, according to Dr Atiur.

He said industry and business friendly tax proposals are the biggest strengths of the proposed budget. If they are implemented, the process of economic recovery will gain momentum.

He further said, the tax collection target of the National Board of Revenue (NBR) has been reduced this year in view of the pandemic, and the proposed target for the upcoming fiscal year has been kept the same. According to him, achieving this target of Tk3,30,000 crore is challenging and the Board of Revenue has to set an example of maximum efficiency to achieve it.

The former governor of the Bangladesh Bank said, "The NBR needs to be more courageous. They collect revenue in a traditional way. The Customs Act 1969 should be changed now. Besides, the VAT Act 2012 has also become weak."

He said there is no alternative to speeding up NBR's digitisation process.

Regarding economic recovery, Dr Atiur said, "Answering the question 'how can 60-70% of the people be vaccinated quickly?' is much more important than issues like growth, deficit, financing, etc. People will feel relieved when they get vaccinated and business confidence will also increase. The strategy of economic and social recovery by overcoming the Covid-19 crisis will be successful."

Participating in the panel discussion, sociologist Khandaker Sakhawat Ali said, "The budget was an opportunity for rethinking for the new poor. Those who have moved from the city to the village due to Covid-19 are not getting jobs there. The third wave of Covid-19 will actually bring many more people below the poverty line, because the villages are also being put into lockdown now. So the newly poor should be given more importance in the budget."

Khandaker Sakhawat Ali added that the budget had promised to vaccinate 70-80% of the population, but it was not clear how long it would take. He thinks that in order to achieve this goal in the coming fiscal year, the emphasis should be on importing vaccines first, and then on producing it. There is no alternative to enhancing diplomatic interaction to achieve this.

At the event, Economist Dr AK Enamul Haque said, "Without structural reforms in the social security programmes, increasing the budget allocation will not help the new poor. To this end, the government should consider changing the current structure to help the new poor."