Speakers at a virtual dialogue on Thursday called for urgent enhancement of cash transfers to the marginalised and affected households in view of COVID-19.
They said there is a need for a transparent and clear reporting of stimulus packages for FY2022.
The speakers hoped that the policymakers will undertake mid-course revisions in resource allocation for the FY2022 budget, particularly by taking cognisance of the ongoing second wave of the pandemic.
These observations emerged at the virtual national dialogue on Social Protection and Employment in Budget FY2021-22: Was the focus adequate?
The dialogue was organised by the Centre for Policy Dialogue (CPD) and Oxfam in Bangladesh in association with the Citizen’s Platform for SDGs, Bangladesh and chaired by Dr Debapriya Bhattacharya, CPD Distinguished Fellow and Convenor, Citizen’s Platform for SDGs.
Higher coverage and budgetary allocation are required for SSNPs in the form of cash transfer and the households urgently need to withstand the immediate loss of income and reduced expenditure, said the speakers.
They said cash transfer should be seen as an effective tool for supporting the needy and triggering supply-side response in the economy.
Higher consumption expenditure will also help to boost domestic demand and create opportunities for employment, said the discussants.
In his keynote presentation, Towfiqul Islam Khan, Senior Research Fellow, CPD said allocation and distribution of resources in FY2022 budget, particularly in the area of social protection, have not been commensurate with demands of COVID times.
He said Budget FY2022 should have been informed by concerns and lessons arising from the COVID-19 pandemic.
However, as the analysis reveals, without three particular social protection programmes (viz. pension for retired government employees; savings certificate interest assistance; and agricultural subsidy) allocation for social protection in the FY2022 budget increased by only Tk. 1,878 crore, said Towfiqul.
“This indicates that allocation for social protection grew by a mere 2.9 per cent in a pandemic year, if the aforesaid three programmes are excluded. There are concerns as regards the inclusion of these three programmes within the social protection budget.”
Professor Ali Ashraf, MP, former Deputy Speaker of the Parliament and Chairman, Parliamentary Standing Committee on Government Assurances and Rashed Khan Menon, MP, Chairman, Parliamentary Standing Committee on Ministry of Social Welfare were present as guests of honour at the dialogue.
Prof. Ashraf stressed on the need for expanding the tax net which would allow higher government expenditure in vital sectors like social protection.
Menon said the ‘new poor’ have been left out in the budget. He also highlighted that the budget formulation process needs to be more participatory through discussion with various stakeholders before preparing the budget.
CPD’s Chairman, Professor Rehman Sobhan also spoke at the event and re-emphasised on how social protection allocation figures would be very low if social protection was re-categorised as per the recommendations from the dialogue.
Prof. Sobhan also highlighted the importance of such dialogues to form a link between the grassroots and the policymakers.
Dr Laila Ashrafun, Professor and Head, Department of Sociology, Shahjalal University of Science and Technology pointed out that the true requirement of social protection is not fully known due to the lack of dialogue with stakeholders.
Adding to this, Dr Manisha Chakraborty, Member Secretary, Bangladesh Samajtantrik Dal, Barisal District Committee stated that the budget should be formulated by incorporating the voices of people.
Commenting on the reduction of corporate tax, Shams Mahmud, former President, Dhaka Chamber of Commerce & Industry (DCCI) opined that such initiatives should have been linked with job retention and creation by businesses.
Ashekur Rahman, Assistant Resident Representative, United Nations Development Programme (UNDP) highlighted how the budget lacked initiatives to address the challenges to the ‘new poor’.
Dr Debapriya said the social protection allocation seems higher because of the inclusion of various elements like pension.
He also stated that allocations for social protection are not made as per vulnerability and these allocations oftentimes do not reach the right person.
Presenting a summary of the discussion session, Professor Mustafizur Rahman, Distinguished Fellow, CPD said that poverty is a multidimensional problem, thus, it should be dealt with accordingly.
He reiterated the need for data and a participatory budget formulation.
Dr Fahmida Khatun, Executive Director, CPD, and Dr Dipankar Datta, Country Director, Oxfam in Bangladesh, shared their views at the dialogue.
The speakers said investment in labour-intensive rural roads and infrastructure would be beneficial to stimulate the rural economy.
Two programmes, they said, funds to combat the outbreak of the corona pandemic (Tk. 7,300 crore), and funds to deal with economic and natural shocks (Tk. 5,000 crore), at the margin, will determine the effectiveness of the social protection budget – details on these will be required at the earliest.
New poor/marginalised people should be prioritised to this end and the stimulus packages will need to be redesigned in view of the experience (lower access and availability as borne out by the survey conducted by CPD) of the past year.
They said more importance should be given to extending support through NGOs and microfinance institutions. There is a need to enhance coverage of credit guarantee scheme.