Desk Report
Publish: 06 Jun 2021, 09:46 pm
It's a symbolic representation || Photo: Collected
The budget that was placed in
Parliament last Thursday (June 3) has no clear guidelines for the middle-class
people. But one of the driving forces of the country's economy is the middle
and lower-middle class. They pay taxes, creating demand in the domestic market.
The Covid-19 pandemic has abridged
the income of this class of people as many of them have lost their job. Many
are in debt to pay for medical care. They have no alternative source of income
other than fixed income. Those who are still struggling to survive also have an
uncertain time ahead. There is nothing about them in this year's budget.
Before announcing the budget,
Finance Minister AHM Mustafa Kamal said in an interview, "I am budgeting
with people from all walks of life in mind. It will be a budget to save
people's lives. It is also a budget to protect people's livelihood. I am
preparing the budget for the fiscal year 2021-22 by adopting a strategy keeping
everyone in mind. 'But the budget did not reflect that. The middle class has
been largely ignored.
Although the middle class suffers the
most during this pandemic as they have limited income sources. There is an issue
of rising costs. Excluding the cost of rent, children's education, medicine,
gas and electricity bills, they spend the rest of the money on daily
necessities. That is, how much they will spend in any sector is determined from
the beginning of the month. If a middle-class family has to buy the rest of the
goods after the 25th of the month, then the loan continues throughout the year.
If the cost of education for a child goes up in a month or the cost of medicine
goes up, then you have to spend a little less on food that month. Because the
income is fixed, the calculation has to be done on the cost of food. If the
house rent increases, the quality of food decreases a little from the next
month, until the salary increases. This is the condition of the middle class.
The budget reflects positive
initiatives for businessmen and industrial entrepreneurs. Expenditure on the
social security sector has also been increased for the poor and the extremely
poor. A budget of Tk 1 lakh 7 thousand 614 crores has been proposed for social
security. So far, 88 lakh poor and helpless people have been getting help in
social security. Another 14 lakh beneficiaries will be added to this budget.
Although the increase in allowances of freedom fighters and tax exemptions for
women has been hailed as positive, there is no good news for the middle class.
There is no special initiative for those whose income has decreased. After the
budget, the middle class will naturally suffer. If the price of goods and
services increases, everyone has to pay for it.
There is no effective program in the
budget for job creation or employment-oriented or those who have become poorer
due to the Covid-19 outbreak. No steps have been taken to ensure human resource
development and livelihood. It is being said those increasing opportunities for
business and industry will increase employment. Everyone will get this benefit.
But no clear idea was found about the recruitment process in the vacant posts
of other autonomous organizations and the recruitment process of regular
manpower, including the recruitment in the government service which was closed
during this pandemic.
The budget for the unemployed is to
provide a one-time cash payment of TK 2,500 directly to the ‘poor families
listed as suddenly affected by unemployment and loss of income across the
country due to the epidemic’. However, there are doubts as to how much
compensation will be given to the affected families in this short allocation.
Besides, no concessions were made in
the budget for individual taxpayers. As before, if the income is more than 3
lakh per year, the minimum tax is Tk 5,000. Inflation was not taken into
account in this case. Still, the middle class submitted the highest return. The
middle class is the class that pays the most taxes, but the benefits are less
than others.
The hindrance to investing in the stock
market is still there. To the middle class, Sanchyapatra (savings papers) were
therefore considered a safe investment. But the new budget has imposed an
obligation on Taxpayer Identification Numbers (TINs) to buy Sanchayapatra above Tk 200,000
and open a postal savings account. Many middle-class people run their daily
expenses on the profit of Sanchayapatra. They have no other source of income.
They will definitely be in trouble as TIN has been made mandatory for these savings
papers.
With the introduction of an extended
health insurance program this year, 80,000 families have been brought under
insurance of Tk 50,000 every year. But, it is also only for those who are below
the poverty line. The middle class did not fall under it. However, many middle-class families are in financial crisis after getting corona treatment.
A joint study by the Health Economics
Unit (HEU) of the Ministry of Health and the Economics Department of Dhaka
University earlier this year found that a single treatment in a private
hospital could cost up to Tk 5,09,000. If the middle class was guaranteed
health insurance, they would receive financial assistance for medical
treatment.
There is no specific initiative on how
to get the students out of the stalemate that has been going on in education
for almost a year and a half. Although the educational institutions are closed
during the pandemic situation, most of the institutions are regularly
collecting the salaries and fees from the students. Parents who are frustrated
with their children are feeling extra pressure to pay these salaries and
allowances. The government had earlier said that the salary fee of the
educational institution would be adjusted. But it did not work. Although the
private educational institutions collect regular salaries and fees from the
students, they are not paying the teachers on time. The teachers are in dire
financial straits. These issues also need proper monitoring.
Economists say the government
recruitment process needs to be kept afloat to invest in educated manpower as
well as business and industrial investment. This will provide employment
opportunities for at least some families. In the last one year, many middle-class people have become indebted. Small traders have lost capital. It also needs to think about how to protect them from this crisis.
Basically the middle class, they have
lost income and gone below the poverty line. So, the expectation that the
economy would go further depending on middle-class development is stumbling a
lot in this year's budget. In such a situation, the big question is how much
the government will be able to take up the strategy of economic recovery instead
of the typical policy.
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Topic : Budget 2021-2022 Middle Class
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