DHAKA, June 7, 2020 (BSS) – The Centre for Policy Dialogue (CPD) today underscored the need for taking measures with top priority to save people from loss of lives and sufferings in the upcoming national budget for the fiscal 2020-21 amid COVID-19 pandemic.
“It is important to understand that this year and the present crisis are not of the types that are generally associated with the usual business cycle and recession. The elephant in the room for economic policymaking, including the upcoming national budget is the COVID-19 pandemic. Saving people from loss of lives and sufferings ought to be the highest priority,” said CPD Senior Research Fellow Towfiqul Islam Khan.
He said this during a virtual briefing on its report on “Challenges of Policymaking in Times of Pandemics”.
CPD Executive Director Dr Fahmida Khatun, Distinguished Fellow Professor Mustafizur Rahman and Research Director Khondaker Golam Moazzem, among others, joined the press briefing.
While presenting the report, Towfiqul Islam Khan said the economic recovery should be measured and monitored in terms of poverty, inequality and employment.
He hoped that the next budget will be able to rise up to this emergent challenge.
He also called upon the government to put utmost priority to four sectors – health, social protection, agriculture and employment – in the next budget for the fiscal 2020-21.
“If the government does not come out of the usual budget framework driven by inertia of business as usual, the needed resources may not be allocated to these areas. The demand estimations in these areas also need to be realistic and evidence-based,” he added.
He also called for other supportive measures such as gradual depreciation of Bangladeshi Taka and implementation of the stimulus packages in a timely manner by prioritising the deserving and marginalised entrepreneurs.
“In view of the uncertain global environment, the government needs to focus adequately to stimulate domestic demand by incentivising domestic consumption. Also, aggressive diplomatic efforts will be required for market diversification and to address the challenges in the areas of overseas employment and remittance inflow,” he added.
Towfiqul Islam Khan said a key objective of the government must be to use the fiscal policy to boost domestic demand and raise disposable income and consumption particularly of the lower and middle-income class.
“In the fiscal 2020-21 budget, raising the tax-free income threshold levels from Taka 2,50,000 to Taka 3,50,000 should be considered. Also, the first three slabs of income tax from 10 percent, 15 percent and 20 percent may be restructured to 5 percent, 10 percent and 15 percent respectively, at least for the next two years,” he added.
He said domestic SMEs were particularly hard hit in view of the corona pandemic. “Considering the adverse financial situation facing particularly the cottage, micro and SMEs, the Ministry of Finance should consider raising tax exempted annual turnover limit for SMEs from Tk. 50 lakh to Tk. 1.0 crore for the fiscal 2020-21,” he added.
Emphasizing on raising health budget based on proper demand assessment, Towfiqul Islam Khan said, “The health sector should get priority in the national budget for FY2021 for obvious reasons. The spread and scale of the pandemic have proved that there is no way to contain the COVID-19 without necessary resource allocations to the health sector.”