The second Covid budget

The finance minister on Thursday presented the 50th annual budget of the country which amounted to Tk 603,681 crore, up from last year's budget of Tk 568,000 crore. Here are our initial reactions to it, and a more detailed analysis will follow.

The health sector is naturally the most focused area during the Covid period and it received some allocation boost last time. But in the current budgetary year, we saw the authorities use only a fraction of the allocated funds. Low implementation of the health ministry's allocated funds at a time of a pandemic stands as a clear testament to our inability to rise to the crisis. How does the government intend to fix this? In his budget speech, the finance minister has mentioned some big plans to tackle Covid, but how realistic are these, really, when implementing the health budget still remains such a difficult task?

That the allocation for the education sector remained the same in terms of size and percentage of GDP is a major disappointment. Covid has literally devastated this sector. The UNESCO had been urging the government to increase the allocation to 6 percent of GDP (from around 2 percent) even before Covid happened. Our educationists have been pushing for a similar increase incrementally. The fact that the government has decided to ignore all recommendations does not bode well for the future of the country to graduate into a middle-income country. The attitude towards education, as reflected in the budget, is a clear signal of how little we have really understood the damage that has been caused by the pandemic in this sector.

The finance minister proposed increasing the allocation for social safety net programmes, which we welcome. However, no details regarding how the beneficiaries of the government's aid programmes will be identified—a major thorn in the side of this sector—have been given. Experts have been urging the government to prepare a national database of people who are in need of government support, since such aid programmes have continued to be marred by corruption even during the pandemic. This recommendation, too, has not been heeded, so how will the government now identify who needs aid and ensure accountability and transparency?

On a positive note, the government has decided to give some tax breaks in certain sectors—including for private healthcare service providers in districts outside of Dhaka, Narayanganj, Gazipur and Chattogram, the agro-industry and other entrepreneurs. We hope this will encourage the private sector.

Unfortunately, although this is the second Covid budget, it does not make clear what lessons were learned from the previous year. There had been criticisms of the ineffectiveness of government aid during the pandemic, particularly in regard to reaching the new poor, helping struggling industries (especially small and medium businesses), etc. It seems this budget has been prepared more or less in the same line as that of last year's. And like last year, even if some of the allocations look good on paper, proper implementation, it seems, will continue to remain the big challenge.