We are going through abnormal times ravaged by the coronavirus pandemic.
The national budget is a tool for a country’s economy management. In the coming budget if this tool is used in the conventional style, it will not be possible to meet the health crisis requirements because priorities have changed.
What are the priorities that keep the economy going? The first one is to solve the prevailing crises in the health sector in order to keep the wheels of the economy running. The economy will not run smoothly, but go on a roller-coaster ride if we fail to protect a the majority of the population from the virus.
The next budget needs to give importance to some issues in the health sector. The government needs to vaccinate at least 130 million, otherwise the economy initiatives there will be no benefit, There is no scarcity of funds to procure the vaccines. The World Bank and Asian Development Bank have offered the necessary funds.
At present, sourcing the vaccines appears as the main challenge. We are doubtful about the collection of a huge amount of vaccines. Indecision and delays in sourcing the vaccines has become a regular phenomenon in the country. Despite no problems with funding and management, failure in providing the people with Covid-19 jabs will be disappointing.
The finance minister should present a roadmap or provide clear instructions regarding a mass vaccinations in his budget speech today. We eagerly expect this from the finance minister. His budgetary speech must reveal how many people have been vaccinated so far, a projection on inoculation of people in the next one year, how the vaccines will be channeled to the receivers and an update of the vaccine stock. The common people will be relieved if the budgetary speech presents this roadmap.
So far as I know, the annual development plan (ADP) for the next fiscal still allocates the standard funds for the health sector despite the coronavirus pandemic. The allocation cannot help us identify the priorities in the health sector. Allocation of funds is a reflection of the government’s will. And the standard allocation or not increasing the allocation is a discouragement. I reiterate that the economy will not be normal if the government does not meet the challenges of the health sector.
The government needs to identify the weak economic sectors that will fail to stand on their own feet. The pandemic has badly hit the cottage, small and medium enterprises. Readymade garments industries have been financially supported by the government while the export markets are reviving.
The cottage, small and medium industries, being the linkages, are connected to the domestic as well as the export markets. Last year's experience suggests that the stimulus declared by the government through the banking channel did not reach all targeted receivers. Small enterprises were hardly supported by the stimulus.
The pandemic-hit people experiencing lay offs and salary cuts must be protected by the social safety net. So far as I know, there will be no special allocation for the new poor.
The government should create employment opportunities in the rural economy because many people losing urban-based jobs have already migrated to the villages.
Corporate taxes need to be reduced to keep the economy afloat. A business enterprise can get more flow of capital money if the minimum tax, regardless of profit and loss, and the advance VAT are withdrawn. If this is happened, it will be good news for the entrepreneurs.
I strongly recommend complete halt to the opportunities of legalising black money. Such facilities are unfair to honest taxpayers. Many people may not declare their legal earning in order to evade actual taxation. Such opportunities make the government’s ethics questionable.
*Zahid Hossain is the former Lead Economist at World Bank's Dhaka office.
*This opinion appeared on the online and print editions of Prothom Alo, has been rewritten in English by Sadiqur Rahman.