Allocation in health, social safety net sectors shrink

Budget 2023-24Prothom Alo illustration

The International Monetary Find (IMF) imposed several conditions and suggested many things while giving loans to Bangladesh.

They stressed on increasing the allocations in the education and health sectors even if it does need a cut in the subsidies for other sectors. They suggested this to highlight the importance of the education and health sectors.

However, there will be no reflection of this in the upcoming budget. It has been learnt that the allocation has been decreased in several sectors defying the suggestion from the IMF.

According to the planning ministry, although the allocation in the education sector has increased in the proposed Annual Development Programme (ADP), there are proposals to cut the allocation for the health sector. Besides, the allocation for social safety nets is also decreasing.

However, around 46 per cent of the proposed ADP has been allocated for two sectors – the power and energy sector and the transport and communication sector.

The size of the ADP for the upcoming fiscal year is going to be Tk 2.75 trillion. The amount of the main ADP will be Tk 2.63 trillion excluding the expenditure of the independent organisations.

The planning ministry has finalised the new ADP in the form of proposals. The new ADP will be passed in the meeting of the Executive Committee of the National Economic Council (ECNEC) on Thursday.

Prime minister Sheikh Hasina will preside over the meeting. The planning ministry will present the proposed ADP for the next fiscal in the meeting. There will still be chances to raise or to reduce allocations if the prime minister or other members of the committee want to.

Allocation for the health sector shrinks

According to the proposed ADP, a total of Tk 162.04 billion has been allocated for the projects under the health ministry, which is Tk 192.77 billion in the current ADP. The allocation in the health sector has decreased by around Tk 30 billion.

On the other hand the allocation in the education sector has increased by around Tk 8 billion. A total of Tk 289.98 billion has been allocated for the education sector in the ADP of the upcoming fiscal.

Bangladesh spends the least in the Asia Pacific region on education and health as compared to the Gross Domestic Product (GDP). The country spends around 2 per cent of the GDP on education at the moment. The amount is less than 1 per cent in the health sector. Economists and researchers have long been demanding increased allocations for education and health sectors.

Allocation for social safety net decreases by Tk 2.86 billion

Daily expenses have increased due to the spike in commodity prices. The actual income of people has decreased. Therefore, everyone expects the allocations in the social safety net sector to be increased in the upcoming budget. Even economists have suggested raising the allocation for the social safety net. However, allocation in this sector will decrease in the upcoming budget.

According to the sources in the planning ministry, a proposal has been made to allocate Tk 33.18 billion in the social safety sector, which is Tk 2.86 billion less than the previous year.

Former secretary and mega-infrastructure expert Muhammad Fouzul Kabir Khan told Prothom Alo, “People are already suffering due to high price hikes. If the allocation for social safety net decreases in the next ADP, then people will become more helpless. Therefore, the allocation in this sector should increase."

However, the lump sum allocation in the next ADP is increasing by Tk 10 billion. This allocation is for covering the emergency expenditures. There will be an allocation of Tk 46.96 billion in the upcoming ADP for this sector, which is Tk 37.67 in the current ADP.

Two sectors cover half of the total allocation

Analysing the proposed ADP, it has been learnt that some 46 per cent of the total ADP has been allocated for two sectors – energy and power and transport and communication sectors.

The highest amount of Tk 759.44 billion has been allocated for the transport and communication sector, which is 29 per cent of the total ADP. The power and energy sector will get an allocation of Tk 443.93 billion, which is 17 per cent of the proposed ADP.

More than 300 projects under these two sectors are being implemented. These sectors cover 44 per cent of the current ADP.

ADP growth rate shrinks

According to the proposal of the planning ministry, the size of the ADP will be around Tk 2.75 trillion, which is 7 per cent or Tk 186.71 billion more than it was in the last ADP. The size of current ADP is Tk 2.56 trillion.

On the other hand, the actual ADP of the current fiscal is increasing by Tk169.34 billion or 6.88 per cent. As a result, the next ADP is increasing the least in terms of money in the last three years. The size of ADP had increased by more than Tk 200 billion in the previous two occasions.

The size of ADP had increased by more than 10 per cent as compared to previous years before the emergence of the coronavirus pandemic.

The planning ministry officials say it has not been possible to increase the size of the ADP that much as the collection of revenue is not as expected. Besides, the government, this year, has undertaken a number of initiatives of austerity to curb the government expenses right from the beginning of the current fiscal. The government has become more cautious in approving new projects.

Speaking to Prothom Alo, Fouzul Kabir Khan said, “Collection of revenue has slowed down. Besides, duty tax is not being collected at the expected rate. Therefore, the size of ADP cannot be enhanced like the previous years.”

According to the sources in the planning ministry, a total of Tk 1690 billion will be provided in local currency in the next ADP and Tk 940 billion will come as foreign aid.

There are nearly 1,500 projects in the next ADP. Besides, there are more than 50 public-private partnership projects in the proposed ADP this year.