Budgetary allocation on social safety net is not enough to meet the Covid time demand, Centre for Policy Dialogue (CPD) said on Thursday with an observation that the allocation figure has “jugglery.”
CPD’s Distinguished Fellow Dr Debapriya Bhattacharya at a virtual dialogue on social protection allocation for FY22 mentioned three types of Jugglery.
“First jugglery is allocation is presented in an inflated way. Secondly, the poor are not getting their proper share and thirdly the allocated money distribution is misdirected,” Dr Debapriya remarked.
Government pension, savings certificate interest assistance and agriculture subsidy account for 38.6 percent of total allocation, Towfiqul Islam Khan, CPD’s senior research fellow, showed in his presentation.
Allocation for social protection in budget FY22 increased by only Tk 18.78 billion, indicating that the allocation grew by a mere 2.9 percent in a pandemic year, if the said three programmes are excluded, he pointed out.
“There are concerns with regard the inclusion of these three programmes within social protection budget. The budget should have addressed the concerns and lessons arising from the COVID-19 pandemic” Towfiqul commented.
The dialogue was organised by the Centre for Policy Dialogue (CPD) and Oxfam in Bangladesh in association with Citizen’s Platform for SDGs, Bangladesh.
Higher coverage and budgetary allocation are required for SSNPs in the form of cash transfer. Households urgently need to withstand the immediate loss of income and reduced expenditure, CPD suggested.
Cash transfer should be seen as an effective tool for supporting the needy and triggering supply-side response in the economy, CPD argued
Higher consumption expenditure will also help to boost domestic demand and create opportunities for employment, it added.
Investment in labour-intensive rural road and infrastructure can prove to be helpful for stimulating the rural economy. CPD sought detailed of two allocations—Tk 73 billion funds to combat the outbreak of the corona pandemic and Tk 50 billion funds to deal with economic and natural shocks saying that effectiveness of social protection budget will largely depend on these.
The think tank also called for redesigning of the stimulus packages in view of the past experience. A CPD survey found lower access to and availability of safety net funds last year.
Extended credit support at subsidised interest rates is required for farmers and low-income people as high cost borrowing will likely put many marginalised households into the debt trap, it 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.
It hoped that policymakers would undertake mid-course revisions in resource allocation for the FY2022 budget in view of the above, particularly by taking congnisance of the ongoing second wave of the pandemic.
Higher unemployment, income erosion, switching to new jobs with lower pay and new dimensions of vulnerability such as emergence of ‘new poor’ during COVID type emergencies, should guide both targeting and allocation.
Prof Ali Ashraf, MP, Former Deputy Speaker of the Parliament and Chairman, Parliamentary Standing Committee on Government Assurances and Mr Rashed Khan Menon, MP, Chairman, Parliamentary Standing Committee on Ministry of Social Welfare were guests at the dialogue.
Prof Ali Ashraf stressed on the need for expanding the tax net which would allow higher government expenditure in vital sectors like social protection.
Rashed Khan Menon stated that 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 Prof Rehman Sobhan observed that Bangladesh has been facing a structural problem for a long time for which social protection allocation has always been inadequate.
He called for a meaningful budget discussion in the national parliament terming the budget passing process “staging a drama” in the parliament.
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 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.