First of all, what is the goal of the budget? The goal of this year's budget should be to tackle the unprecedented health and economic challenges posed by the Covid-19 pandemic and restoration of stability of the economy. To what extend is this budget responding to this task?
Targeting an 8.2% growth rate of GDP in the next financial year raises the question that whether it has been assumed that economic activities will return to normal shortly and economic growth will resume its previous trend? This assumption means, economic activities will quickly pick up the normal pace and the economy will experience a "V-shaped recover".
However, the question remains whether reality corroborates this assumption. As we are witnessing increasing health hazards, rising cases of infection, and deaths, when will it be possible to resume full-fledged economic activities is a huge question.
On one hand, we are expecting shock to two main drivers of our economy—export and remittance. The two biggest destinations of our exports—the European Union and North America—are predicted to experience negative growth. Thus, whether in the future, export to these countries will increase and to what extent is a question.
On the other hand, the oil price has plunged unprecedentedly. The economies of the countries of the Middle East, where our workers are employed, have contracted. Thus, there is significant reason to be concerned about the flow of remittance from these countries.
Since economic activities have come to a halt in those countries, there is also reason to worry that they might send a huge number of our immigrant workers back home. Whether the targeted growth rate of 8.2% is congruent with these crises, which will intensify in the near future, is a question.
This budget has seen an increase in allocation for the health sector, yet there also remains a question about this increase. The current health crisis that we are experiencing and our incompetency and lack of capability to tackle this crisis is an accumulated result of decades. The health sector, especially the public health sector has been neglected for long.
There is also a lack of accountability in the private health sector. The accumulated result of these is being reflected in the current crisis and the poor state of the public health service.
I appreciate the increase in allocation. However, the management of the health sector must also be improved. Without the improvement of management, effective usage of the increased allocation will be in question. We have often raised a question regarding corruption and mismanagement in the health sector. In parliament, during the budget session, claims have been made that hospitals have been transformed into specialized hospitals for Covid-19.
However, the question remains whether these hospitals are actually in motion, as media reports indicate a huge gap between announcement and implementation. Implementation of announcements must be ensured.
I think increasing allocation for social protection is commendable and I highly appreciate this. However, it must be remembered that a huge portion of the budget allocation for social protection is actually dedicated to pension and allowance schemes. Thus, the question remains, how much allocation has been increased in real terms?
In the current crisis, a huge number of people have slid below the poverty line and in the coming days many more will follow; a huge number of people have lost their jobs.
Therefore, especially when measures like zoning are being undertaken, initiatives must be taken to include this populace in the social protection coverage and supply them with food and cash assistance; a mere increment of allocation will not be enough.
However, I still believe that allocation for social protection as well as the health sector should have been increased more.
The government announced stimulus packages at the beginning of the crisis, which is again, highly commendable. However, the stimulus package will be operated through the banking sector, which itself, as we know, is in crisis. There are crises of mismanagement, institutional weakness, and default loan in the banking sector.
The budget should have had a guideline for the operation of the stimulus packages through such a crisis-ridden banking sector. I believe, there should have been a guideline for ministries, Bangladesh Bank, and other banks as well, in this regard. We are also hearing about various difficulties the SMEs are facing in accessing their Tk 20, 0000 crore stimulus package through the banks.
I think the target for revenue collection is not realistic. Due to the current crisis, meeting even the revenue target set in the revised budget is quite impossible. I do not think that the huge target that has been proposed for the next financial year is realistic.
If the revenue target is not met, how increased allocation for health, social protection, and education will be funded? Thus, the other options for financing should be explored. I am afraid that exploring other options for financing might get dissuaded, due to such unrealistic revenue targets.
I think we can borrow loans from international organizations and in that case, we can negotiate for loans with flexible conditions and low-interest rates. Also, I think Bangladesh does not have much time in this regard as many other countries have entered into negotiations with these international organizations and are negotiating for loans with flexible conditions and low-interest rates. Thus, I think, this option must be explored.
Lastly, I would like to talk about the budget deficit. I believe, the budget deficit might increase in the upcoming days, especially if the revenue target is not met and cost pressure increases. However, I don't regard it as a big problem. Even if the budget deficit rises to 6-7%, we will have to accept that for the next two financial years.