In a virtual press briefing on the upcoming national budget for the 2021-22 fiscal, the Centre for Policy Dialogue (CPD) suggested that the government take up a expansionary fiscal policy, address the weakness in tax collection and control money laundering instead of imposing new taxes on the taxpayers.
CPD also recommended that the government focus more on equity and redistributive justice, and less on the growth of gross domestic products (GDP).
These recommendations were shared at the virtual press briefing held on 31 May on the State of the Bangladesh Economy in FY2020-21.
CPD’s senior research fellow Towfiqul Islam Khan made the keynote presentation.
The keynote said that implementation rate of total public expenditure was 42 per cent, marginally lower than last year (43.9 per cent). During the July-April period of the current fiscal, the implementation rate of the annual development project was 49 per cent while the pace of implementation remained the lowest in the health services division with only a rate of 31.3 per cent.
During the July-February period of the current fiscal, distribution of credit to private sector was 8.8 per cent despite the target was set at 15 per cent.
Rationalising the requirement of an expansionary fiscal or budgetary policy, Towfiqul Islam Khan said the government could still borrow from the exchequer as the total domestic borrowing of government stood at 32-33 per cent of the GDP.
CPD recommended that the government set up an agriculture price commission and a banking commission.
The keynote speaker said an agriculture price commission would facilitate farmers to sell produce directly to the market at a fair price. The commission would help estimate about the to-be-imported essential products at the right moment.
CPD stressed the need to set up of a banking commission. The research organisation found the government’s assessment on default loans very unclear. It also traced lack of good-governance in distribution of the pandemic-induced stimulus packages.
CPD suggested a multi-stakeholder taskforce be formed for monitoring the distribution of the Covid-19 cash support and fiscal stimulus packages. CPD said the government should approve the next budget for the health, social safety net, agriculture, education, and small-medium enterprises.
CPD’s distinguished fellow professor Mustafizur Rahman suggested that the government should strengthen institutional skills to bring pace in budget implementation.
Citing the government’s claim that social safety net gets three per cent of the GDP, CPD’s executive director Fahmida Khatun, said the actual allocation was not more than 1.5 per cent.
Khondaker Golam Moazzem, CPD’s research director, observed that the government tended to bypass if there was requirement for the crucial reformation.
*This report appeared on the online edition of Prothom Alo, has been rewritten in English by Sadiqur Rahman.