Covid-19 Fund Likely to Get Bigger in Next Budget

The government is planning to create an emergency budget to fight the Covid-19 pandemic by strengthening the health sector taking the worsening situation in neighbouring India into account.

The funds will be spent to import, preserve, and manufacture vaccines, manage the immunisation of the population and compensate the frontline warriors.

The government plans to allocate Tk 10,000 crore for the emergency Covid-19 response in the next financial year 2021-22, up from Tk 8,500 crore in the revised budget, according to officials involved in the process of the upcoming budget preparation.

Besides, it also plans to earmark huge funds for social safety net programmes and giving allowances and several packages to the frontline workers.

The social safety net fund size is expected to increase by 30 per cent to Tk 125,000 crore in the budget down the line from Tk 95,574 crore set aside in the revised budget of this fiscal year, said an official.

“The government has no choice but to set aside the coronavirus emergency response fund for the next fiscal if the pandemic situation gets worse and the third wave hits the country as neighbouring India is reeling under the severe and intensives cases,” said a senior official at the Finance Ministry.

About 2.45 crore people of the country are new poor who are below the property line due to the second wave of the pandemic, according to a survey of Power and Participation Research Centre (PPRC) and the BRAC Institute of Governance and Development (BIGD).

“This is worrisome. So, we want significantly to expand the social safety net programme,” said the official.

The World Bank’s $500 million will be used as the coronavirus emergency response fund, according to officials at the Finance Ministry.

Health and foreign ministries have verbally informed about the import and manufacturing of the Russia Sputnik V vaccine on an emergency basis, as Serum Institute of India failed to supply doses as per the agreement.

A virtual meeting on the preparing budget for 2021-2022 presided over by Finance Minister AHM Mustafa will be held tomorrow (Sunday). It was followed by the Budget Management Committee and Coordination Council on Foreign Exchange virtual meetings.

“The next fiscal year’s budget deficit might be increased to meet the next year’s food crisis along with the expansion of social safety net,” Dr AB Mirza Azizul Islam, the former finance adviser to the caretaker government.

Former International Monetary Fund Adviser Dr Reza Kibra said the government should prepare the emergency budget considering the third wave of the coronavirus pandemic.

“I would like to recommend the government to prepare a 100-day programme for feeding hungry people and for this, the emergency budget should be Tk 35,000 crore,” he said.

An allocation of funds to buy vaccines from Russia should be kept as India has failed to provide vaccines as per the agreement, he added.

Speaking about the upcoming budget, Finance Minister AHM Mustafa Kamal recently said, "Life cannot be stopped by the effect of the coronavirus pandemic. A goal must be reached by tackling everything in this situation.”

“Many of the government's priority projects will be completed next year. There will be no slackening in the timely release of funds for those projects. There will also be allocations. Apart from this, the concerned division will be more active in implementing the revenue collection program as per the set targets,” he said.

The finance minister said, "The new budget of the government will include guidelines, programs, and necessary allocations to ensure employment of the people."

The next budget will also have proposals to attract domestic and foreign investment, he also said.

In the current budget, the government kept Tk 10,000 crore exclusively to provide emergency response to deal with the pandemic. Later, the fund size was slashed by 15 per cent or Tk 1,500 crore to provide incentives on remittances.

The government will continue to compensate the frontline workers like the current fiscal year when Tk 500 crore was allocated for the public employees who were affected or died of the pandemic.

The families of more than 100 employees who died of the Covid-19 have been compensated from the fund, according to the Finance Division.

Besides, doctors and nurses working in the Covid-19 dedicated hospital are now receiving two months’ basic salary and allowances from the allocation of Tk 150 crore. An incentive package of Tk 1,500 crore is being implemented to create employment for the family members of the affected health workers.

*The writer is a Dhaka Tribune journalist
  Source: Business Insider Bangladesh

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