In a welfare state, a strong health sector is a must. And the foundation of a strong health system could have been built in the first two years of the pandemic. But we have not seen that in the first year of the pandemic. If we want to see changes in the health sector in the medium term, we need to increase allocations, increase spending capacity and increase expertise in the health sector.
It is not acceptable that the health sector is not capable of spending 100 per cent of its allocation in the national budget. Along with this, there is uncertainty over vaccines. A drive to vaccinate 50 per cent of the total population would ensure the return of investments in this sector. In this case, the country’s economic activity will naturally begin with new ventures. Now the main stimulus for new investment in this sector is the vaccination programme.
The talks of lives and livelihoods in the budget is right. But we have to save our lives first, and only then, our livelihoods would be saved automatically. The stimulus packages, which were declared earlier, were quite perfect. But we have to see whether that stimulus packages for businessmen has helped increase their productivity, competitiveness and export potential or not.
We say every year during the budget discussions that we are not allocating enough for the health sector and social safety net. One of the major reasons behind this is our government expenditure is still stuck at 15 to 16 per cent of our GDP. This time too, the budget has included 18 per cent of government expenditure in proportion to GDP. But whether we will be able to implement this goal depends a lot on our revenue and the strength of our revenue management.
Now let’s consider that 11 per cent of the expenditure will come from the revenue and the rest 6 per cent is deficit money. But where is the certainty that this 11 per cent would come from the revenue sector for sure.
The finance minister has said about 2.5 million people pay income tax regularly, which is quite unnatural considering our population of 170 million.
The government should conduct an experiment. There are several tax zones in Dhaka. The government would select some of these zones to provide the tax-payers of those selected zones with special facilities.
The government would be able to assess whether the amount of revenue collection has increased or not due to the special facilities provided to the taxpayers after a year or every six months. This experiment can be conducted outside Dhaka too.
The national budget and planning should be more integrated. It’s quite unfortunate that even after 50 years of our independence we still cannot provide accurate and updated information regarding the numbers related to poverty in the country. The last household survey was conducted back in 2016 and the last labour force survey was conducted in 2016-17 which means we are three to four years behind in this regard.
The situation has changed due to the emergence of the coronavirus pandemic. New poor has been added.
In my opinion, Bangladesh Bureau of Statistics (BBS) should provide updated information in this regard by conducting quick surveys in the city areas from which we would be able to know about the numbers of the old poor, new poor and temporarily poor people.
A major setback for stimulus packages is the systematic flaw. Large businesses were able to get the fund in a short period of time. But it was not the case for the medium and small businesses. A solution to this can be made by adding their mobile phone related data or bank information to their national identity cards. The fund of the stimulus packages could be distributed through mobile banking then.
Overall, questions regarding our capacity to implement the entire project or our spending capacity are being raised repeatedly. Why can’t we? Is it due to the lack of leadership or the project is not good? The issue of leadership at the ministry level needs to be taken more seriously.
We have graduated from lower income countries to lower middle income countries. We are thinking that no more reforms is needed. We have deviated from the culture of reforms. Behind the progress we have made over the past decade is the policy of reforms. However, institutional reforms could not be done that much.
After the pay commission of 2015, we could not make any major reforms in the sectors including the revenue, finance, health and social safety net. In the past, we were forced to adopt a policy of reform due to the pressure from the foreigners.
It is a good sign that we do not have any pressure from the foreigners now-a-days, but there is no direction either that we would continue the reform processes decisively for the sake of the development of the country. However, we cannot take our country forward only by reforming our policies alone. We must need institutional reforms.
*Binayak Sen is director general of Bangladesh Institute of Development Studies (BIDS).
*This article, originally published in Prothom Alo print edition, has been rewritten in English by Ashish Basu.