There is an urgent need to enhance cash transfers to the marginalised and affected households in view of COVID-19 – initial budget allocation should not be a constraint to this end. Higher coverage and budgetary allocation are required for SSNPs in the form of cash transfer. Households urgently need to withstand the immediate loss of income and reduced expenditure. Cash transfer should be seen as an effective tool for supporting the needy and triggering supply-side response in the economy. Higher consumption expenditure will also help to boost domestic demand and create opportunities for employment. Investment in labour-intensive rural road and infrastructure would be beneficial to stimulate the rural economy. Two programmes: funds to combat the outbreak of the corona pandemic (Tk. 7,300 crore) , and funds to deal with economic and natural shocks (Tk. 5,000 crore), at the margin, will determine the effectiveness of social protection budget – details on these will be required at the earliest. New poor/marginalised people should be prioritised to this end.
There is a need for a transparent and clear reporting of stimulus packages for FY2022. The stimulus packages will need to be redesigned in view of the experience (lower access and availability as borne out by the survey conducted by CPD) of the past year. Extended credit support at subsidised interest rates is required for farmers and low-income people as high cost borrowing will likely put many marginalised households into the debt trap. More importance should be given to extending support through NGOs and microfinance institutions. There is a need to enhance coverage of credit guarantee scheme. It is hoped that policymakers will undertake mid-course revisions in resource allocation for the FY2022 budget in view of the above, particularly by taking congnisance of the ongoing second wave of the pandemic.
These observations emerged at the virtual national dialogue on Social Protection and Employment in Budget FY2021-22: Was the focus adequate? The dialogue was held on Thursday, 17 June 2021 and organised by the Centre for Policy Dialogue (CPD) and Oxfam in Bangladesh in association with the Citizen’s Platform for SDGs, Bangladesh.
While making the keynote presentation, Mr Towfiqul Islam Khan, Senior Research Fellow, CPD stated that allocation and distribution of resources in FY2022 budget, particularly in the area of social protection, have not been commensurate with demands of COVID times. Budget FY2022 should have been informed by concerns and lessons arising from the COVID-19 pandemic. However, as the analysis reveals, without three particular social protection programmes (viz. pension for retired government employees; savings certificate interest assistance; and agricultural subsidy) allocation for social protection in budget FY2022 increased by only Tk. 1,878 crore. This indicates that allocation for social protection grew by a mere 2.9 per cent in a pandemic year, if the aforesaid three programmes are excluded. There are concerns as regards the inclusion of these three programmes within social protection budget.
Fiscal constraints should not be any reason for inadequate relief when emergency support for the poor and ‘new poor’ means the difference between destitution and falling into debt trap on the one hand, and, hope and ability to stand up on the other. Factors specific to localities should be taken into cognisance. Higher unemployment, income erosion, switching to new jobs with lower pay and new dimensions of vulnerability such as emergence of ‘new poor’ during COVID type emergencies, should guide both targeting and allocation.
Access to information, transparency, costs involved in accessing services, timing, innovation by service providers, redressal of grievances, whole of society approach, zero tolerance and reliable data are vital factors that the presentation recommended from the perspective of mid-course revision and implementation of the social protection budget.
Professor Ali Ashraf, MP, Former Deputy Speaker of the Parliament and Chairman, Parliamentary Standing Committee on Government Assurances and Mr Rashed Khan Menon, MP, Chairman, Parliamentary Standing Committee on Ministry of Social Welfare were present as Guests of Honour at the dialogue. Professor Ali Ashraf, MP stressed on the need for expanding the tax net which would allow higher government expenditure in vital sectors like social protection. Mr Rashed Khan Menon, MP stated that the ‘new poor’ have been left out in the budget. He also highlighted that the budget formulation process needs to be more participatory through discussion with various stakeholders before preparing the budget.
CPD’s Chairman, Professor Rehman Sobhan also spoke at the event. He re-emphasised on how social protection allocation figures would be very low if social protection was re-categorised as per the reccomendations from the dialogue. Professor Sobhan also highlighted the importance of such dailgoues to form a link between the grassroots and the policymakers.
Four Discussants also spoke and shared their views at the dialogue. Dr Laila Ashrafun, Professor and Head, Department of Sociology, Shahjalal University of Science and Technology pointed out that the true requirement of social protection is not fully known due to the lack of dialogue with stakeholders. Adding to this, Dr Manisha Chakraborty, Member Secretary, Bangladesh Samajtantrik Dal, Barisal District Committee stated that the budget should be formulated by incorporating the voices of people. Commenting on the reduction of corporate tax, Mr Shams Mahmud, Former President, Dhaka Chamber of Commerce & Industry (DCCI) and Honorary Consul, The Federal Democratic Republic of Ethiopia opined that such initiatives should have been linked with job retention and creation by businesses. Mr Ashekur Rahman, Assistant Resident Representative, United Nations Development Programme (UNDP) highlighted how the budget lacked inititatives to address the challenges to the ‘new poor’.
Dr Debapriya Bhattacharya, Team Leader of the Project, Distinguished Fellow, Centre for Policy Dialogue (CPD) and Convenor, Citizen’s Platform for SDGs, Bangladesh chaired the session. He remarked that the social protection allocation seems higher because of inclusion of various elements like pension. Dr Bhattacharya also stated that allocations for social protection are not made as per vulnerability and these allocations oftentimes do not reach the right person.
Presenting a summary of the discussion session, Professor Mustafizur Rahman, Distinguished Fellow, CPD said that poverty is a multidimensional problem, thus, it should be dealt accordingly. He reiterated the need for data and a participatory budget formulation.
Dr Fahmida Khatun, Executive Director, CPD, and Dr Dipankar Datta, Country Director, Oxfam in Bangladesh, shared their views at the dialogue. The national budget for FY2022 has been presented at a time when the Bangladesh economy has been reeling under the shocks of the first wave of COVID-19 and has been experiencing the second wave of the pandemic. Not surprisingly, measures in view of addressing the adverse implications of the ongoing pandemic are one of the key concerns in the context of FY2022 Budget. The dialogue was organised with the objective of assessing the national budget in light of survey-based findings on the emerging social protection and employment scenario in view of COVID-19. The dialogue seeked to come up with a set of recommendations for consideration by the policymakers.
Mr Shah Alam, Ms Ajeda Begum, Mr Md. Motiar Rahman, Ms Sheuly Akter, Ms Parita Rani, Mr Ashraf Ali, Ms Soheli Parvin Jhorna and Mr Hasanur Rahman Jhantu spoke on behalf of the CBOs of 13 districts.
The dialogue was organised as part of the project titled ‘Enhancing the participation of community-based organizations (CBOs) and civil society organizations (CSOs) in democratic governance in Bangladesh’ which is being implemented by the CPD and the Oxfam in Bangladesh, with support from the European Union in Bangladesh. The project aims to contribute to the implementation of the Sustainable Development Goals (SDGs) by the Government of Bangladesh in a number of areas.
Government officials, academicians, development workers, NGO representatives, private sector representatives, representatives from civil society organisations, and media among others to took part at the dialogue.