The budget should aim to diversify the engines of economic growth

The Bangladesh Knowledge Forum (BKF) expects the 2021 budget to build on the gains and strengths of Bangladesh’s economy and the robust and remarkable economic performance achieved over the past few years.

There is a need for more focus on knowledge-based approaches and effectiveness-related tools and mechanisms, based on experiences and lessons learned from the implementation of previous Annual Development Budgets and Programs (AfDB) .

According to a press release, BKF further proposes that the next budget can be framed within a medium and long-term strategic framework in line with the eighth five-year plan and the strategies and outlook of the forward plan.

BKF suggests prioritizing sectors that would have a faster impact on post-pandemic recovery on the one hand, and on the other hand, would drive inclusive and sustainable GDP growth.

The budget should ensure greater support for ready-to-wear garments (RMG) exports and overseas remittances, and further aim to diversify the engines of growth and boost economic competitiveness to enable Bangladesh to achieve high-income country status by 2041.

In terms of allocation, for the current year, the following sectors should be prioritized: agriculture, health, ICT, education, social protection and safety nets, manufacturing, energy and infrastructure.

In addition, the implementation of current mega-projects and the completion of Special Economic Zones (SEZs), SMEs and IT industrial parks will enhance growth potential. At the same time, incentives for entrepreneurship and investment promotion should contribute significantly to increased employment and incomes, support further poverty reduction and minimize inequalities in access to capital and commodities in both rural and urban areas.

Stimulus packages should be increased to 8% of GDP with greater efficiency in reaching targeted beneficiaries.

The budget may envisage GDP growth of 7.5% for the current year, keeping the budget deficit below 5.5% of GDP, emphasizing the mobilization of domestic resources to achieve a ratio 10% tax-to-GDP, with broader coverage, improved automation, extensive inter-agency coordination and effective accountability.

It is necessary to ensure that the current phases of recovery and stabilization continue to boost economic efficiency and broaden competitiveness. It will also facilitate a smooth transition towards diversification of sources of growth and prepare the economy to meet the post-graduation challenges of LDCs.

For greater efficiency and impact, there is a need to upgrade current budget models and sector assessment, improve monitoring and evaluation tools, and strengthen project and program implementation.

In addition, resilient fiscal and monetary frameworks should be geared towards sustainably controlling inflation and facilitating consumer access to essential food and non-food consumer goods.

Addressing issues related to debt management, low disbursements, cost overruns and rationalization of expenditures will ensure lasting economic resilience.