With corona virus casting a long shadow over every nook and cranny of the economy, particularly after the month-long lockdown that impacted adversely on the health sector, every one was looking forward to the budget for the current fiscal. The feeling that extraordinary circumstances, such as at present, will require both an imaginative and pragmatic budget, was widely shared. It was assumed that the budget will re-arrange the priorities for allocation of funds in the light of the physical and economic consequences of corona virus. This would mean giving top priority to health sector which has been in the front line of the efforts to contain the deadly virus, followed by relief given to the poor who have lost jobs and income due to lockdown, widening of the safety net programme to cover more people who have become poor as a result of the pandemic, promoting job creation, both in public and private sectors and giving emphasis on agriculture as a new thrust sector, both for food security and to export various agricultural products and maintain educational activities at pre-pandemic level.
The budget for the next fiscal, as announced, has not been disappointing by the standard of size nor by its identifications of the priority sectors though in respect of the latter something remains to be desired. It can claim to be 'big' because of the total amount of estimated expenditure to the tune of Tk. 5,080 billion which compares favourably with Tk. 5,015 billion in the last budget. However, the budget is also ambitious because of financing with Tk. 3750 billion from revenue collection, a target that will be difficult for NBR to achieve if past experience is anything to go by. In the budget speech the health sector has been mentioned as the one assigned top priority for allocation of funds, followed by agriculture after which comes financial assistance to the poor who became unemployed after the lockdown. Job creation for the unemployed, new and the existing number in the labour force, has been assigned the fourth priority. Though it makes little difference, the placement of agriculture above financial assistance for the poor who have lost their income appears incongruous because the poor need help immediately whereas agriculture can wait for the near term. Since most of the sectors that deserve to be in the top category have been prioritised (except education) as per general expectations and according to the logic of the situation the budget can, however, be considered pragmatic. This is so far, so good. But the significance of this prioritisations can only be judged on the basis of allocations made and programme design outlined. A brief review of the priority sectors in the budget speech, their allocations and the purpose for which allocations have been made is given below, in order to arrive at a conclusion regarding the appropriateness and adequacy of the budget in the context of pandemic.
The corona pandemic has taken a heavy toll of the resources and capacity of the health sector. It is literally bursting at the seams under pressure from patients who are daily flocking hospitals and clinics for tests and treatment. The present crisis has shown that the health sector lacked trained personnel, kits for testing and equipments like ventilator for treatment of patients and protective equipments for the frontline staff in hospitals. At some point of time, even availability of oxygen cylinders became scarce. That the health care system in the country has been utterly unprepared, being ill-equipped and mismanaged to cope with a pandemic, became apparent before long. The government hurriedly filled up vacant posts of 2,000 doctors, 6,000 nurses and 1,500 technicians which showed that before the crisis there was very little sense of urgency about adequate staffing of hospitals. The long queue of patients waiting outside hospitals for hours for corona tests and returning home unsuccessfully exposed the poor state of health care system that has become the norm which even a public health emergency like the corona pandemic could not make any difference to. As days have passed, cases of irregularities in purchase of equipments, masks etc. and corrupt practices in issuing false certificates on test results have become almost regular news. News of patients being turned away from hospitals denying them treatment and charging exorbitant amount as fees from patients lucky enough to get treatment, have been published in newspapers almost daily. The short-comings revealed by these sordid instances portray a healthcare system that is not only dysfunctional but is also almost on the verge of collapse. This background provided the point of departure for the intervention in the budget for strengthening the health sector, particularly with a view to making it reasonably efficient to handle the pandemic. This required that the budget would not only make adequate allocations but also and more importantly give an outline of the measures for improving the healthcare system, rescuing it from the morass into which it has fallen over the years.
The allocation of Tk. 292 billion in the budget is higher by Tk. 30 billion compared to last year. But it accounts for only 6 per cent of the total expenditures constituting 2.0 per cent of GDP. According WHO, allocation to health sector should be at least 6 per cent of GDP. However, it is not the size of allocation that matters under the present circumstances, given the exigency of the pandemic. The allocation has to be analysed in the context of the overall need for improvement of healthcare services by removing the present shortcomings and man-made flaws. In particular, allocation has to be judged against the tasks laid down in the National Preparedness and Response Plan for treatment of Covid-19 patients, including Covid test. In the budget speech it has been mentioned that isolation units have been opened in all districts and upazilla hospitals, Covid-19 dedicated hospitals have been set up in Dhaka and district towns for treatment of patients, laboratories have been set up for corona testing and various public health services have been converted into modern-service providing institutions. All these preceded the budget and irrespective of whether or not the above measures have added to the efficiency of the healthcare system, the budget can not take any credit or blame for their past operation. What was expected from the budget was the improvement and strengthening of the existing system with new interventions. Narrating or enumerating the measures taken in the past does not absolve the present budget from making its own contribution for improvement of the system.
The declaration that the budget has made 'structural change' by assigning top priority to health sector does not exhaust the responsibility of the budget to make material changes on the ground through allocations and programme-based interventions. If the day to day performance of the system is not addressed in the budget, mere declaration of intent or cosmetic changes like `structural change' in prioritisation will not make any difference to the system, irrespective of allocation.
Next to health sector priority has been assigned to agriculture, though, as has been mentioned earlier, assistance to the poor who lost their income due to lockdown, should have followed in the sequence. Be that as it may, it is reassuring that agriculture has been recognised as a very crucial sector in the context of Covid-19. Firstly, it is expected to provide food security without which the negative fallout of the pandemic may play havoc with the lives of people, particularly the poor. Secondly, faced with the prospects of declining exports of traditional items, new items of exports have to be promoted and here agricultural products, fresh and processed, appear very promising. Thirdly, agriculture continues to provide employment and livelihood to the bulk of the labour force. In view of the incidence of unemployment among educated youth and the return of migrant workers to their villages, employment opportunities in the agricultural sector have to be created on urgent basis. All told, agriculture has assumed a new importance in the aftermath of the pandemic outbreak. It is therefore important to see what has been provided in the budget for the sector and for what purposes. The allocation given to agriculture, Tk. 205 billion, though higher than last year appears inadequate to give the sector a major thrust for breakthrough, both in terms of production and employment creation. In a budget that has given Tk. 275 billion to public administration, allocation of Tk. 205 billion to an important sector like agriculture is not a big deal. Apart from inadequate allocation, the budget is silent about the specific areas of interventions for which allocated funds would be spent. In the present circumstances, a strategy for diversification of production, modernisation of production technique, processing, packaging, storage and marketing has to be drawn up. It would be in the fitness of things if the budget gave an outline of the strategy to be followed up by the Ministry of Agriculture. The budget has rightly given emphasis on the provision of subsidies to agricultural sector and increasing their volumes. Similarly, commendable is the emphasis given on procurement of paddy to give fair price to the farmers. Perhaps here mention of the need to improve the system to rid it of malpractices would have been in order.
According to a recent BIDS study, the number of poor will increase to about 30 per cent from the present 21 per cent owing to the impact of Covid-19 on low income group. A large number of people became jobless following countrywide lockdown (holiday), closure of factories, shops and establishments. According to a preliminary estimate by Asian Development Bank (ADB), the number of jobless people could rise to 1.4 million. Their ranks would swell when migrant workers return from the middle-east. Under the stimulus package announced earlier in April, provision has been made to pay Tk. 2,500 for each poor family for two months, with a total of 5 Lac families to be covered under the programme. Due to delayed start, the programme is still continuing. It is not enough for the budget to mention this and there should have been allocation for similar assistance to the poor families as their need will be for more than two months. Apart from this there is need to include more poor families under this programme as the number of families affected by covid-19 is more than 5 lacs.
The budget has mentioned about expanding the social safety net programme covering more people and has made enhanced allocation for the same. The total allocation for social safety net made in the budget is Tk. 267 billion which is higher than the allocation in the last budget (Tk.240 billion). It has been pointed out by many that the safety net programme includes government pensions which account for a large amount of the total. Moreover, the programme also includes payment of interest charges. All these expenditures decrease the amount of money available for payment to the poor. The budget should have been specific about the allocations made for payment to the poor.
The budget speech mentions about a `comprehensive plan' behind the allocations made. Apart from this assertion there is no other information about this. In view of the wide ranging impact of Covid-19 on the economy, a thorough estimate of the damages caused and the need for funds and other assistance to compensate for the losses and to rebuild the economy, should have been made. On the basis of these findings the existing plan priorities, strategies and policies need to be revised. This can be conveniently done in the form of a two year plan on the basis of which the budget for the present year and the next could be prepared. In view of the major changes already effected by the pandemic and more to come, the implementation of the present 5 year plan should be put on hold. In fact, the budget should have been based on a new emergency plan, whether it is called a 'comprehensive' or a two year plan as suggested above.
The budget for corona virus cannot be considered satisfactory only on the basis of allocations made. Specific interventions in the form of programme activities in the day to day operations of the sectors are needed for recovery and revival of activities. For some sectors, it may not be enough to restore the status quo ante. Additional supply and provisions of goods and services will be required to meet the new demand for the same resulting from the emergency of the pandemic. Such a pragmatic and forward looking vision is missing from the budget which makes it look less like a blue print for turning over a new leaf in the corona damaged economy. This budget appears like one design to overcome the corona virus impact but actually is an exercise in crisis management with relief measures. It does not lay down the foundation for ascent on to a higher growth path in a sustain manner.
hasnat.hye5@gmail.com
The pandemic budget: An appraisal
Hasnat Abdul Hye | Published: August 29, 2020 18:18:53
The pandemic budget: An appraisal
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