South Asian Network on Economic Modeling (SANEM) has proposed to increase allocation in health, education, social safety net and agriculture sector in the budget to reduce poverty and inequality and generate more employment.
The think tank also called for appropriate reforms in both revenue generation and expenditure sides to make budget more effective.The recommendation came at SANEM’s pre-budget webinar titled “Budget 2021-22: Reality and Expectations” held on Sunday
Dr Sayema Haque Bidisha, research director of the Sanem, presented keynote paper at the event.
Sayema Haque said that the economy is facing some new difficulties with some three crore new poor in the country due to loss of income and employment.
That is why the government should impose more attention on the social safety net to help to maintain their livelihood, she noted.
The pandemic has caused the national poverty rate to increase from 21.6 percent to 42 percent, but no specific programme for the new poor was introduced in the budget of 2020-21 fiscal, Dr Sayema mentioned in her presentation.
In order to bring the new poor households over the poverty line, the government is required to transfer Tk 51.33 billion each month which is equivalent to 1.9 percent of average monthly GDP, she proposed.Dr Bidisha said although the safety net allocation was around 16.8 percent of the total budget in FY 2020-21, this figure is much lower if allocations for pension for retired government officers, savings certificate interest and secondary and higher education stipend are not considered.
Furthermore, she suggested that major social safety net programmes including old age allowance, allowance for the widow, deserted and destitute women, allowances for the financially insolvent disabled, education stipend programmes and school meal programme should be readjusted and modified according to the recommendations of the National Social Security Strategy (NSSS).
On the agriculture, she cited that although the agricultural sector has fared better than the other sectors during the pandemic, it must not be neglected in the upcoming budget.
In her presentation, Dr Sayema Haque acknowledged that the budget for the next fiscal year would have to consider both pre-COVID as well as post-COVID challenges.
She pointed out that the existing budget structure suffers from low revenue generation and slow implementation of ADP.
Despite the consistently high GDP growth, pace of employment generation has not been impressive and there has been low spending in human resource development, she claimed.
Speaking at the programme, SANEM Executive Director Dr Selim Raihan said: “It is extremely important for the policymakers to come to terms with the reality of the current situation and acknowledge the gravity of the socioeconomic crisis that the country is currently facing.”
Dr Raihan also urged the government to focus on policy reforms to boost private sector investment which is essential to stimulating the post-COVID recovery process.