The new financial year 2021-22 has started. Strict restrictions have started from the first day of the financial year. Although the factories are open, the shops are closed. Trade and commerce has come to a standstill again. Manzur Hossain, director of research at BIDS, spoke about the impact of the new fiscal year and stricter restrictions on the economy. Transcribed by Arifur Rahman.
The new fiscal year has started with strict restrictions. With the rate of infection and mortality increasing, it is clear that we will have to live with Corona for many more days. As long as I can bring everyone under the vaccine, I will not be free from corona. Not everyone is likely to be vaccinated within the next one year. As a result, we have to deal with coronavirus.
More waves of corona will come in the future. Restrictions will be given again. Repeated restrictions will have an economic impact. People will lose income. Many will fall below the poverty line again. Trade will be closed. The economy will slow down.
The government should have taken many steps to deal with such a situation. But that was not seen in the budget. There is no big change in the social security sector. The budget has set aside money to buy vaccines. The vaccine will come. But there is uncertainty as to how many vaccines will match. If 50 to 60 percent of people can be vaccinated by December, the economy will turn around. Failure to do so will leave uncertainty in the economy. Therefore, the main priority should be given to the provision of vaccines.
On the positive side, the apparel sector is on the rise. The world export market is slowly opening up. Because, vaccination is being arranged in those countries. The government has given several opportunities to keep the export market afloat. If it is possible to continue the production of garments in accordance with the rules of hygiene, it will certainly be a relief. The trend of income sent by expatriates is positive. These two indicators of the economy are comforting for us.
But the problem is that those who are involved in small and medium industries are getting worse. Their business is closed. As a result, many will fall below the poverty line anew. Newcomers who fall below the poverty line should be given cash assistance more than once. Failure to do so will not improve their condition. For those who have just fallen below the poverty line, this is a scary time.
Corona has reduced the income of many. As a result, there will be pressure on revenue collection. That’s normal. But the important thing is that I can’t bring those who have the ability to pay taxes under the tax. Taxes have to be collected from those who are able to pay taxes at the time of coronation. Because, the revenue of the government has to be increased further so that the budget deficit is reduced. The government has to implement the expenditure projections. The process of increasing income needs to be further strengthened.
The government needs to reduce some unnecessary expenditure. In sectors where there is no need to spend money now, there is a need to spend money to prevent the spread of the disease. Emphasis should be placed on the implementation of mega projects so that work on the projects can be completed quickly.
The government has stopped providing cash assistance to low-income people in the face of criticism. It is important to reintroduce cash assistance for low-income people. Besides, the government can provide food aid to the poor. In places where low income people live, rice can be given at the rate of Rs.
Among those who have been given incentives in the SME sector, it is seen that the middle sector traders have benefited more. Small businesses are not benefiting from incentives. There is a need to increase incentives in small and medium enterprises. This money should be distributed through non-governmental organizations (NGOs) or micro-credit institutions. Small entrepreneurs will not get money if they do not distribute incentive money through NGOs.
Restrictions are not the final solution in Bangladesh. It is not possible to lift restrictions in the long run. Now just focus on the ticker. Keep in mind, however, that Ticker has an international politics. If it is possible to vaccinate 8 to 90 million people in the next 6 months, it is possible to get out of the current situation. Need to contact different sources for vaccination. But of course vaccines should be produced within the country. For that, we have to focus on vaccine production irrespective of party affiliation. If the vaccine cannot be produced, the corona problem will not be solved in the next three to four years.