Dhaka, Tuesday, 04 October 2022

FY 21-22

Budget analysis

Budget analysis

The country is now going under the second wave of the COVID-19 pandemic. Meanwhile, the presence of the Indian COVID-19 variant is adding extra tension. No one knows when this pandemic will end. The country's economy is under a lot of pressure due to the impact of the pandemic which has been going on for more than a year. According to a survey jointly conducted by the Power and Participation Research Centre (PPRC), a private research institute, and the BRAC Institute of Governance and Development (BIGD), 25 million people have become new poor during the pandemic. There is no good news in any other sector except remittances.

The challenge now is to survive in the various crisis of the pandemic. Despite this, the Finance Minister has taken a tough challenge to move the economy forward. He is going to present the Budget for FY 21-22 themed as "Priority on lives and livelihoods, tomorrow's Bangladesh." This is his second budget during the global pandemic. The pandemic has made us face a difficult reality. Now a question has arisen ‘which is first among life and livelihood?’ It has become harder for the working class to stay home despite the strict restrictions of the government. If the pandemic spreads further, the way of livelihood will also be hampered. Amid these crises, the Finance Minister will unveil the Tk 603,681 crore proposed national budget for the 2021-22 fiscal year on Thursday, June 3.

COVID-19 has pointed out the problems and crises in the health sector. Tk 32,731 crore has been allocated in the health sector in this year's proposed budget giving priority to COVID-19 related projects. Compared to the previous financial year, which is 3,486 crores more. Besides, for the prevention of COVID-19, a bulk allocation of Tk 10,000 crore has been allocated like last year. The Finance Minister hopes to get $1.5 billion in vaccine support from various development partners to buy COVID-19 vaccines outside of this allocation. The proposed budget emphasizes vaccination against COVID-19. The government has set a target of bringing 80 per cent of the population under vaccination. The challenge now is to collect or produce vaccines as needed.

There has always been debate over allocations in the health sector. According to the experts, the allocation is less than the health sector needs. Again, there is a deficit in the capacity of the health sector to use the allocation properly. In this reality, the question remains as to how successful the health department will be in fulfilling its mission of saving the lives of the citizens by tackling the pandemic. If we want to move the economy forward by eliminating poverty and unemployment, we have to increase employment opportunities. But government investment is not growing. The company tax in the manufacturing sector has been reduced by 2.5 per cent in the budget. It is expected to have a positive impact on job creation. Experts say that the SME sector creates more employment in the country but big industrial owners get more benefits.

Compared to last year, the allocation for the education sector has been increased by Tk 5,751 crore in the proposed budget. However, the problems in the education sector have also increased. The dropout rate of students due to the impact of the pandemic has increased, child marriage has also increased. People's sufferings have risen due to the rise in commodity prices. According to the Bureau of Statistics, the average inflation rate rose slightly to 5.56 per cent in the year to April this year. The budget has set a target of keeping inflation at 5.3 per cent. The budget is not based on tax money alone. It also includes debt accounts. It also includes debt accounts. Dependence on the debt will increase if revenue is not collected as per the target. Revenue earnings have been estimated at Tk 389,000 crore. Which is about 11 per cent more than the revised revenue of the outgoing fiscal year. Experts say it will be difficult to achieve this goal without increasing the efficiency and effectiveness of the overall tax system. There is always a challenge in budget implementation. The pandemic over the years has exacerbated that challenge. The government is succeeding in meeting the challenge - that is what we want to see. We want people's lives to be saved and livelihood to be provided.