The budget for the upcoming fiscal year (FY) should have more than usual policy supports designed to deal with the worsening poverty situation and rising income inequality due to Covid-19 pandemic, opined speakers at a webinar on Wednesday.
Strengthening social protection for urban areas was also highlighted in the discussion, as the ongoing pandemic has badly impacted the city people, they said.
The speakers also felt that the budget for FY'22 should provide greater support to the health sector. They also suggested speedy use of budgetary resources for the greater interest of the country's economic recovery.
The speakers, including economists, business leaders, and journalists, were taking part in the webinar, styled budget dialogue episode-1, organised by The Financial Express (FE).
FE Editor Shah Husain Imam delivered the welcome address at the webinar. Policy Research Institute of Bangladesh (PRI) research director Dr M A Razzaque was the moderator.
Dr Binayak Sen, director-general of the Bangladesh Institute of Development Studies (BIDS), Chairman of BUILD Abul Kasem Khan, Chairman of Envoy Group Kutubuddin Ahmed, and Special Correspondent of FE Siddique Islam were the panelists.
The BIDS director-general said the large sectors utilised the stimulus packages fully, while the micro and cottage sectors could not.
He opined that the urban poverty that intensified due to the Covid needs to be addressed properly in the budget.
"The rural people are getting financial or other benefits, but the picture of the urban areas is not clear."
Dr Sen also said the growth targets should be realistic. In this context, he referred to the 8th five-year plan and said during this Covid period, the plan estimated the GDP growth for Bangladesh at 8.0 per cent.
The BIDS chief opined that the health sector needs to be prioritised in the budget. Proper coordination among the Prime Minister's Office, the Ministry of Finance and the Ministry of Health is needed for effective outcome.
Referring to the second wave of Covid-19 in neighbouring India, he said focus should be given on disaster preparedness in the budget.
Dr Sen also suggested setting up primary health centres for the urban poor.
The Envoy Group chairman said the country's export is now facing a problem because of the shipping lines. Freight cost has surged manifold, and delay in export is a matter of concern.
There is a need for lobbying for GSP-plus in the 27-member EU, as Bangladesh will lose GSP facility in the economic bloc following the country's graduation from the least developed country (LDC) status, he mentioned.
Mr. Ahmed further said Bangladesh needs to pursue free trade agreements to boost its exports.
Bangladesh is a beneficiary of tension between the US and China, he noted.
"We're the second largest clothing exporter, while Vietnam is third, and the East Asian country usually produces high-end products, which have less demand in the global market now."
The government had taken a bold decision by opening up the clothing sector in May 2020, he added.
The BUILD chairman said anomalies in the tax system should be addressed in the next budget.
The advance income tax, realised by taxmen, cannot be refunded later; and it creates a tax burden for the taxpayers.
Mr. Khan opined that the domestic market is a matter of concern, as it is not picking up. Domestic consumption has dropped significantly as a result of the Covid.
He proposed that incentives for entrepreneurs should be given in such a way that if they can generate more employment, they would get more incentives.
The FE special correspondent said urban poverty and rising inflation should be duly addressed.
