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Welfare-oriented budget on cards to ease Covid-19 fallout
ECONOMY
Abul Kashem
02 May, 2020, 10:30 pm
Last modified: 02 May, 2020, 10:36 pm
https://tbsnews.net/economy/banking...ney-worth-over-tk70000cr-revive-economy-76435
The government plans a pro-growth budget, with increased welfare spending, for the fiscal year (FY) 2020-2021 to pull out the economy from a pandemic induced downward spiral.
The health sector will be getting the highest priority in the next budget. The government is likely to make a bigger allocation for this sector outlining a long-term plan for its sustainable development.
Cash support will continue for the people who lost their jobs amid the ongoing shutdown. Around Tk4,000 crore is going to be set aside for this purpose, said Finance Division officials who are preparing the budget.
Besides, the finance ministry will make a special allocation for creating employment opportunities for the rural poor to ensure their food security.
Finance Division officials said the main focus of the budget will be on returning the devastated economy to its pre-pandemic state within a short time.
At the same time, the government wants to ensure food security by increasing domestic food productions amid an apprehension that the world might face a famine.
It also plans to create employment opportunities for the poor to maintain strong domestic demand and consumption. Various programmes will be incorporated in the budget to achieve this.
The agriculture sector will get strong support in the form of subsidy in the next fiscal. Agriculture Minister Dr Abdur Razzaque has already announced that Tk9,000 crore will be kept aside to provide subsidy for fertiliser, irrigation, and seeds.
Finance Division officials said additional allocations will be made for automation and innovation in the agriculture sector. Moreover, initiatives will be taken to rehabilitate marginal farmers who have been affected by the pandemic.
Every year, the government increases the number of beneficiaries under its various social safety net programmes by 10 percent on average, but this year this rate might be raised to 12-15 percent, said Mohammad Zainul Bari, Secretary to the Ministry of Social Welfare.
Approximately five core workforces in the formal sectors are now practically unemployed, as the industries and the service sector of the country are mostly closed due to the coronavirus shutdown.
Prime Minister Sheikh Hasina has announced a Tk760 crore incentive package to provide one-time cash assistance to the relatively poorer segment among these jobless workers for the months of May and June this year. The amount of financial assistance for each beneficiary will be determined once the list of the jobless workers is ready.
According to finance ministry sources, persons getting cash support from the incentive package will get the same support in the next fiscal as well.
The social welfare secretary said the relief programmes will be implemented by the Ministry of Disaster Management and Relief, while his ministry will implement the social safety net programmes.
State Minister for Disaster Management and Relief, Dr Mohammad Enamur Rahman told The Business Standard the government has primarily decided to provide 20 kilograms of rice and cash incentive for the months of May and June this year against the 50 lakh ration cards that are being prepared. This programme will not continue in the next fiscal if the coronavirus situation improves.
The size of the forthcoming budget is yet to be finalised, the officials said, adding that they are calculating the earnings and expenditures within Tk5.5 lakh crore at the moment.
The budget deficit has been planned at below 5 percent of the Gross Domestic Product (GDP).
Finance Minister AHM Mustafa Kamal says he will present the proposed budget for FY2021 before the National Parliament on June 11.
While commenting on plans to generate revenues for the next budget, an official of the Finance Division said there are no plans as well as no scope for imposing fresh tax on any sector.
The government is considering ways to boost revenue generation without imposing extra taxes, he said, adding the government may raise import duties on some luxury items to discourage their import.
Meanwhile, Ahsan H Mansur, executive director, Policy Research Institute of Bangladesh, said the government has to focus on the recovery of the economy and employment in the coming budget.
"Creation of jobs takes time, but jobless people need income support. And cash transfer is the best way to do so," Mansur told The Business Standard.
He said the government must have a plan in the next budget on how it can implement fiscal measures taken to support people and help the economy recover.
He also hopes that the government will continue to provide subsidies to the farm sector to ensure food security.
The economist urged the government to focus more on the effective implementation of development projects as these would be key to creating jobs and revive the rural economy.
In a recent conversation with The Business Standard, the finance minister expressed hope that there will be no shortage of funds for the next budget. "That we have never defaulted on any loan taken out from foreign sources is a big strength for us. We are having discussions with various international development partners including the World Bank, International Monetary Fund, and Asian Development Bank in this regard. We expect to get sufficient funding from them on the budget and on various projects for the next fiscal."
The country's economy will get back to its previous state within two to three months after the coronavirus situation improves, the finance minister hoped.
He said, "Businessmen in the country have already chalked out plans on what to do after the pandemic is over. The people of the country are also very hard-working.
ECONOMY
Abul Kashem
02 May, 2020, 10:30 pm
Last modified: 02 May, 2020, 10:36 pm
https://tbsnews.net/economy/banking...ney-worth-over-tk70000cr-revive-economy-76435
The government plans a pro-growth budget, with increased welfare spending, for the fiscal year (FY) 2020-2021 to pull out the economy from a pandemic induced downward spiral.
The health sector will be getting the highest priority in the next budget. The government is likely to make a bigger allocation for this sector outlining a long-term plan for its sustainable development.
Cash support will continue for the people who lost their jobs amid the ongoing shutdown. Around Tk4,000 crore is going to be set aside for this purpose, said Finance Division officials who are preparing the budget.
Besides, the finance ministry will make a special allocation for creating employment opportunities for the rural poor to ensure their food security.
Finance Division officials said the main focus of the budget will be on returning the devastated economy to its pre-pandemic state within a short time.
At the same time, the government wants to ensure food security by increasing domestic food productions amid an apprehension that the world might face a famine.
It also plans to create employment opportunities for the poor to maintain strong domestic demand and consumption. Various programmes will be incorporated in the budget to achieve this.
The agriculture sector will get strong support in the form of subsidy in the next fiscal. Agriculture Minister Dr Abdur Razzaque has already announced that Tk9,000 crore will be kept aside to provide subsidy for fertiliser, irrigation, and seeds.
Finance Division officials said additional allocations will be made for automation and innovation in the agriculture sector. Moreover, initiatives will be taken to rehabilitate marginal farmers who have been affected by the pandemic.
Every year, the government increases the number of beneficiaries under its various social safety net programmes by 10 percent on average, but this year this rate might be raised to 12-15 percent, said Mohammad Zainul Bari, Secretary to the Ministry of Social Welfare.
Approximately five core workforces in the formal sectors are now practically unemployed, as the industries and the service sector of the country are mostly closed due to the coronavirus shutdown.
Prime Minister Sheikh Hasina has announced a Tk760 crore incentive package to provide one-time cash assistance to the relatively poorer segment among these jobless workers for the months of May and June this year. The amount of financial assistance for each beneficiary will be determined once the list of the jobless workers is ready.
According to finance ministry sources, persons getting cash support from the incentive package will get the same support in the next fiscal as well.
The social welfare secretary said the relief programmes will be implemented by the Ministry of Disaster Management and Relief, while his ministry will implement the social safety net programmes.
State Minister for Disaster Management and Relief, Dr Mohammad Enamur Rahman told The Business Standard the government has primarily decided to provide 20 kilograms of rice and cash incentive for the months of May and June this year against the 50 lakh ration cards that are being prepared. This programme will not continue in the next fiscal if the coronavirus situation improves.
The size of the forthcoming budget is yet to be finalised, the officials said, adding that they are calculating the earnings and expenditures within Tk5.5 lakh crore at the moment.
The budget deficit has been planned at below 5 percent of the Gross Domestic Product (GDP).
Finance Minister AHM Mustafa Kamal says he will present the proposed budget for FY2021 before the National Parliament on June 11.
While commenting on plans to generate revenues for the next budget, an official of the Finance Division said there are no plans as well as no scope for imposing fresh tax on any sector.
The government is considering ways to boost revenue generation without imposing extra taxes, he said, adding the government may raise import duties on some luxury items to discourage their import.
Meanwhile, Ahsan H Mansur, executive director, Policy Research Institute of Bangladesh, said the government has to focus on the recovery of the economy and employment in the coming budget.
"Creation of jobs takes time, but jobless people need income support. And cash transfer is the best way to do so," Mansur told The Business Standard.
He said the government must have a plan in the next budget on how it can implement fiscal measures taken to support people and help the economy recover.
He also hopes that the government will continue to provide subsidies to the farm sector to ensure food security.
The economist urged the government to focus more on the effective implementation of development projects as these would be key to creating jobs and revive the rural economy.
In a recent conversation with The Business Standard, the finance minister expressed hope that there will be no shortage of funds for the next budget. "That we have never defaulted on any loan taken out from foreign sources is a big strength for us. We are having discussions with various international development partners including the World Bank, International Monetary Fund, and Asian Development Bank in this regard. We expect to get sufficient funding from them on the budget and on various projects for the next fiscal."
The country's economy will get back to its previous state within two to three months after the coronavirus situation improves, the finance minister hoped.
He said, "Businessmen in the country have already chalked out plans on what to do after the pandemic is over. The people of the country are also very hard-working.
