Give cash to poor to boost consumption | The Daily Star
12:00 AM, May 10, 2021 / LAST MODIFIED: 05:15 AM, May 10, 2021

Give cash to poor to boost consumption

Citizen’s Platform for SDGs urges government

The government should provide cash support to the poor and the low-income groups to protect their consumption and boost domestic demand as the socio-economic impact of the pandemic will linger for them, said the Citizen's Platform for SDGs, Bangladesh yesterday.   

A substantive cash transfer to disadvantaged communities, liquidity flow to micro, small and medium enterprises, domestic market-oriented manufacturing diversification, post-harvest mechanisation of agriculture, and IT-based high-value service provision should be strategic priorities for the upcoming budget, it said.

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"Current circumstances demand special attention to consumption protection of the poor and the low-income people, and employment promotion at the micro, small and medium enterprise level," said Debapriya Bhattacharya, convener of the platform, at a virtual media briefing.

The platform comprises more than 100 non-state actors and their networks and associates.

It said Covid-19 had adversely affected every citizen of Bangladesh. But the impact on the marginalised and disadvantaged people had been more profound.

"Hence, specific policies are needed for these vulnerable groups."

According to the platform, employment had been restored through low skills and low-paid jobs. Extensive under-employment, indebtedness and inequality are growing because of the second wave.

"A minimum two-three year time frame is needed to have a robust recovery strategy with core budget. We need to press all four triggers -- consumption, investment, government spending, and net exports," Bhattacharya said.

The revenue collection was half of the target, and development expenditure was 42 per cent of the total allocation in the first nine months of the fiscal year. Besides, the budget deficit grew because of the lower use of the concessional funds from the development partners and higher borrowing from the banking industry.

The disadvantaged population bear the disproportionate adverse impact of such shortfall, said Bhattacharya during his presentation.

"In 2020, we were concerned about resource availability to confront the pandemic. This year, we can say it is the inability to implement the public expenditure programmes that has become the binding constraint."

The platform called for prioritising the use of concessional foreign finance to improve the implementation of the annual development programme and keep the budget deficit from increasing.

It suggested creating an integrated database of potential recipients of government supports and social safety nets, and improving the quality of the public expenditures.

To have a more significant fiscal multiplier effect, Bhattacharya said resources should be directed to poorer households, which have a high marginal propensity to consume and small entrepreneurs, who have a high marginal propensity to invest.

The estimated net fiscal support, which excludes the support for the agriculture sector and construction of houses, was as low as 1.63 per cent and 15.54 per cent of total allocations in FY20 and FY21, respectively. In terms of the share of GDP, they were 0.04 per cent and 0.19 per cent, respectively.

"Fiscal support was not only low in terms of allocation but also slower in delivery. This overwhelming constraint cannot be addressed exclusively through strengthening of administrative monitoring. This will need wide-ranging structural and institutional reforms," said Bhattacharya.

Prof Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, said income inequality had widened due to Covid-19. "Many people have lost their jobs or are earning less."

"Moreover, consumption inequality has increased. In that case, I would like to see equality being brought in the redistribution of the budget," he said.

He urged the government to increase the allocation for social safety nets by at least 50 per cent in the upcoming budget. The funds should be distributed keeping in mind the local issues of marginal groups.

Rasheda K Choudhury, executive director of the Campaign for Popular Education, said education was the most neglected sector in budget allocation.

"I don't see any budget for educational research. There was already inequality in the education system. But this inequality is more evident, especially for the disadvantaged people, who cannot buy a digital device," she said.

She called upon the government to provide an incentive package in the budget for the education sector to address the inequality.

Shaheen Anam, executive director of Manusher Jonno Foundation, said ethnic minorities, dalits, harijans, disabled and fishermen were subjected to various forms of discrimination and violence.

Only 0.33 per cent of the budget was allocated for the disabled and 2 per cent for all the ethnic minorities, she said.

"We know that this budget is not enough. However, we have not seen any monitoring system as to whether the allocation is being distributed properly and whether the recipients are benefiting from it."

In the next budget, a specific allocation has to be made for the marginalised people, Shaheen Anam said.

She called for a separate budget for the deprived children.

"Is there any scope for the budget to bring back the girls who are dropping out of education? It is vital because child marriage is increasing. It has a long-term effect, such as unexpected pregnancies."

Mushtaque Raza Chowdhury, vice-chairperson of Brac, urged the government to double the allocation for the health sector.

Sultana Kamal, a former executive director of Ain o Salish Kendra, chaired the programme.

Asif Ibrahim, chairman of the Business Initiative Leading Development, Syed Nasim Manzur, chairman of Landmark Footwear Ltd, and Anisatul Fatema Yousuf, coordinator of the Citizen's Platform for SDGs, Bangladesh, also spoke. 

 

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