‘Proposed budget focused on GDP calculations only’

The government has presented a budget based on only GDP calculations for the upcoming fiscal year, ignoring the issue of life and livelihood at a time when the country is reeling from Covid-19 rampages.

The budget has not reflected a plan to address the present crisis ensuring universal healthcare by overhauling the sector's fragile state, creating new jobs, increasing foreign investment and industrial productivity, and reducing regional disparities.

Speakers said this at an online seminar on "Life, Livelihood and National Budget" organised by the Center for Governance Studies (CGS) on Sunday.

Rashed Al Mahmud Titumir, professor at the Dhaka University's Department of Development Studies, presented the keynote paper in the webinar moderated by CGS Executive Director Zillur Rahman.

During the Covid-19 crisis, people are losing jobs every moment, with productivity declining, exports being hampered, labour costs falling, and social safety crumbling, according to the paper.

If this situation lasts for a medium term, the number of poor in Bangladesh may go up to 43 percent, which may reach 47.43 percent in the long term.

However, it can be reduced to 40 percent with short- and long-term plans. The budget has not reflected it, said the paper.

In the proposed budget, growth figures have been mathematically calculated, with the production sector losing about 12.4 percent (or 31.44 percent of GDP) during the period. If it is taken into account, it will be around 4 percent less growth than last year's.

Setting the GDP growth target at 8.2 percent means the nominal GDP will have to grow by 9.4 percent which is impossible, given the history of Bangladesh, the paper added.

Dr Fahmida Khatun, executive director of private think-tank Centre for Policy Dialogue, said the private sector investment target has been raised to 25.3 percent, meaning that private investment, in amount, should grow by over 125 percent in one year. It has never happened in Bangladesh.

Again, the private investment growth at such a high rate with 16.7 percent credit flow is an unrealistic plan, she added.

"We still need to work in various areas, including Ministry of Industry, Ministry of Commerce, Bangladesh Investment Development Authority (Bida), ports and traffic situation, to increase private and foreign investments."

In the discussion, speakers criticised the health sector the most as it needs the biggest reform at the moment. But the proposed budget has no plan in this regard.

They said even with the allocation given, there will not be much development in this sector due to a lack of capacity and efficiency.

Dr Selim Jahan, former director of the UNDP Human Development Report department, said the proposed budget should have been public welfare-oriented as the health system has collapsed, poverty impacts may burgeon and food security may stumble.

"The health sector needs not only an increased allocation but also an efficient management to bring marginalised people under the service on a priority basis."

He also said proper allocations and policies are needed for ensuring employment and food security, increasing productivity and rebuilding life and livelihood already stormed by Covid-19.

Former commerce minister Amir Khasru Mahmud Chowdhury said time has come to repair the fragile health sector with experts, not bureaucrats. "Otherwise, our life and livelihood will remain in danger."

Agriculture Minister Dr Abdur Razzaque said, "We are now in a crisis of both life and livelihood. This time the budget has been a usual one. But if the current situation prolongs, there is an opportunity to renew the budget plan."

Responding to criticisms of the government's revenue target, he said there are many landlords, doctors and lawyers who do not pay taxes properly. The finance minister has planned to increase tax by bringing them under the net.

Referring to the health allocation, the minister said it is fine but there are questions about their spending capacity.

Besides, he recommended reducing sufferings at some places, including Bida, the Ministry of Finance, the Ministry of Commerce, the Ministry of Industries etc.