Prioritizing of health, education, social safety net, agriculture stressed in budget; SANEM

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DHAKA, May 30, 2021 (BSS) – Health, education, social safety net and agricultural sectors should get priority in the next budget, said the South Asian Network for Economic Modelling (SANEM).

The recommendations came from a pre-budget virtual dialogue titled “Budget 2021-22: Reality and Expectations” organized by SANEM today to discuss the importance of the national budget in addressing the challenges of the on-going COVID-19 pandemic.

Dr Selim Raihan, Professor, Department of Economics, University of Dhaka and Executive Director, SANEM, moderated the event.

Dr Sayema Haque Bidisha, Professor, Department of Economics, University of Dhaka and Research Director, SANEM presented the keynote speech .

Economists, researchers, academicians, development practitioners, journalists and students were also present during the webinar, said a press release.

In her presentation, Dr Sayema Haque Bidisha acknowledged that the budget for the next fiscal year would have to consider both pre and post COVID challenges.

She pointed out that the existing budget structure suffers from low revenue generation and slow implementation of ADP.

“Furthermore, despite the consistently high growth in GDP, the pace of employment generation has not been impressive and there has been low spending in human resource development. In addition, the pandemic has now impacted the livelihoods of millions due to job losses, business closures and reduction in income,”

Dr Bidisha stressed that the prime objective of the upcoming fiscal budget should ensure better health management while restoring the income level of people through employment generation.

To attain this objective, she mentioned four key areas of priority: Health, Education, Social Safety Net and Agriculture.

In the fiscal year 2020-21, around 5.15 per cent of the total budget and 13.60 per cent of the development budget was allocated for the health sector.

“Current health expenditure in Bangladesh stands at 0.92% of GDP which is much lower than the South Asian average of 3.48%,” she added.

She said the government has advanced a proposal to spend a lump sum of TK 10,000 crore for COVID-19 related health expenditure.

However, during the COVID-19 emergency, a slump in ADP utilization and ADP Implementation rate in health has been noticed.

In the education sector, Bidisha said inaccessibility of digital devices, internet facilities and the high cost of internet have caused disparities in online learning.

She said the growing inequality in access to education between rural-urban and poor-non poor households is alarming because it can further aggravate socioeconomic inequalities in the long run.

Dr Bidisha mentioned that increasing the share of education expenditure in the next fiscal budget and ensuring the proper implementation of the budget is extremely crucial to ensure inclusive development and overcome the losses that have been incurred over the past year.

Furthermore, she suggested that major social safety net programmes including old age allowance, allowance for the widows , deserted and destitute women, allowances for the financially insolvent disabled, education stipend programs and school meal program should be readjusted and modified according to the recommendations of the National Social Security Strategy (NSSS).

The research team also listed a number of recommendations for the upcoming budget including: greater allocation in health and education along with efficiency in utilization; monitoring and evaluation of budgetary allocation on a regular basis; additional incentive packages to incorporate some of the affected sectors which were not sufficiently covered in the existing ones.

The recommendations also include quarterly monitoring of incentive packages; reform in revenue collection through greater focus on income taxation; curtailing the operating budget and being selective in case of development programs; creating a digital database of the new poor along with those in the informal sector with the help of NGOs, development partners.

Besides, the SANEM also suggested for incorporating the new poor, urban poor in the allocation of social safety net; targeting safety nets towards employment generation through small scale low interest loans/training etc.; materializing implementation of incentive packages for CSMEs through non-traditional means; prioritizing allocation in farm mechanization, storage, agriculture research;

SANEM also advocated for allowing provisions for vaccination, capacity building of health professionals, COVID related research and equipment in health budget; introducing stipends and meal programs to reduce school dropout rates; making specific allocations for tackling digital divide in education including device availability, cheap internet facility through tax/VAT rebate.

Dr Selim Raihan said since the budget for 2021-22 FY is going to be the second budget to be announced during the pandemic, policymakers should primarily focus on addressing the urgent needs that have emerged due to the on-going crisis.

“It is extremely important for the policymakers to come up with the reality of the current situation and acknowledge the gravity of the socioeconomic crisis that the country is currently facing,” he added.

Dr Selim stressed the importance of COVID-19 management related budget allocations to salvage the health sector through ensuring timely vaccination drives, border controls and building capacity of the medical workforce.

“We think that such a crisis situation cannot be tackled by the government alone. Therefore, the government needs to properly define the corporate social responsibility of the various business associations,” he added.

Dr Selim said BGMEA, one of the most established associations in Bangladesh, the world’s second largest exporter of garments, do not need to rely on government support to such a high extent.

Rather, it should step forward to take on some of the responsibilities of the employees in their organization, he opined.