Working class as always left out

The driving force of the country’s economy is the middle income and lower middle income people. But there is no respite in this year’s budget for the penny-pinching middle class and lower middle class. Their expenditures will continue going up even as the global pandemic and resulting recession hits their incomes and slashes their jobs.

The coronavirus pandemic has reduced income of these two groups including the poor one. During this Covid crisis, many have lost their jobs and moved to villages. As the pandemic is ongoing, attempts are being taken by the government in the budget to provide some relief to the common people. But that is far enough for them.

Finance Minister AHM Mustafa Kamal is set to place over Tk 6.03 lakh crore national budget for fiscal 2021-2022 (FY 22) in the Jatiya Sangsad (JS) today aiming to expedite economic recovery and bolster the government efforts to save the lives and livelihoods of country’s people. The theme of the budget this time is “Jiban O Jibikar Pradhanno, Agamir Bangladesh,” which means “Prioritising live and livelihood, upcoming Bangladesh.”

However, the structure and allocation of the budget is not showing the same as mentioned in the theme. The allocation for middle income and poor people is only 2 per cent.

This will be the 50th national budget of the country coinciding with the golden jubilee of the country’s independence while the 13th in a row for the Awami League government. The budget will also be the 3rd straight budget for the incumbent Finance Minister AHM Mustafa Kamal. The size of the national budget for FY 22 is likely to be Tk 6,03,681 crore which is 6.28 per cent or Tk 35,681 crore higher than the original budget size of the current fiscal year which was Tk 5,68,000 crore. Meanwhile, the Budget Session of the current Parliament has begun on Wednesday to approve the national budget.

Budget experts said that the upcoming budget should focus on livelihoods, not on complacency of high growth. Government should not only increase the allocation, but also ensure transparency in the use of money. Coronavirus needs a definite action plan to recover the economy. The big challenge now is to eradicate poverty, eliminate inequality and create employment.

Although there are various social security programs for the poor in the budget, but there is nothing for the lower middle class. But economic recovery will not be successful if these artisans behind the demand-making in the economy are not protected. The middle class sustains the society. The deterioration of this middle level means the loss of the economic and social balance of the society. There is no good news for the lower middle class.

Dhaka University Economics department professor Dr. Sayema Haque Bidisha said, “Those who were lower middle class have gone below the poverty line. At the moment they need money and food assistance. For those who are newly poor, the budget should have an allocation for them. There is huge financial cost to the state’s infrastructure and ADP. As a result, it is not possible for us to save human life and livelihood at this time. As a result, some projects need to be temporarily closed and funds allocated.” 

She said that there was a lot of discussion on rich-poor inequality and equitable distribution of wealth. But there is no real reflection on it. The new budget should give a direction on property tax.

Economist Mamun Rashid said, “Most of the lower middle class is employed. If we want to increase their purchasing power, we have to bring them under cash assistance. The government should see through their administration how many people from the lower middle class in the institutional and informal sectors have lost their jobs. It remains to be seen whether any measures can be taken to return those who have lost their jobs in the informal sector. And if the lower middle income person is in a small business, they can be assisted through PKSF, micro credit disbursement organization, SME Foundation and other related organizations.

A leading think-tank of the country, Centre for Policy Dialogue (CPD), recently urged the government that the national budget for the fiscal year 2021-22 needs to focus more on equity and redistributive justice as well as protecting jobs and saving lives.

They also argued that there should be less focus on economic growth in the upcoming budget. “Attaining a high GDP growth should not be what the budget for FY22 should set its target on. Rather, the budget should be one of redistribution, particularly addressing the underlying factors driving rising inequality,” CPD said.

According to a recent survey conducted by CPD and Oxfam Bangladesh, 61.57pc people had lost jobs in March and April last year due to the adverse economic impact of Covid-19. Moreover, the Bangladesh Institute of Development Studies (BIDS), a government research organization, found that 16.4 million people had fallen below the poverty line as the incomes of the working class in urban and rural areas dropped sharply due to the prolonged lockdown. 

It seems as if the government is telling the middle-class families, “We have nothing to give, but we'll be taking less of what you earn.”

Finance Minister to place budget today