Budgetary grants raised to Tk 12,680cr to fight pandemic

The budgetary grants rose more than four times to Tk 12,680 crore in the next fiscal year on the back of a large block allocation to meet urgent health and social protection expenses.

The grants were Tk 2,983 crore in the revised budget and Tk 2,317 crore in the original budget in the current fiscal year.

Finance Minister AHM Mustafa Kamal has set aside Tk 10,000 crore for a fund to be used to mitigate the impacts of the deadly virus, which has so far infected 119,198 people in Bangladesh and killed 1,545.

"Whenever there is an emergency, we will use this fund, especially in the health sector," the minister said yesterday.

If money is needed to invigorate the rural economy and support the agriculture sector, the fund might be used, he said.

The fund would be used to buy equipment for the health sector, recruit doctors, nurses and other healthcare professionals, said an official of the finance ministry.

If needed, the government may go for another round of direct cash transfer to the people who have been rendered jobless since the onset of the pandemic, he said. It may be used for expanding food support.

The government has already allocated Tk 2,500 to each of 50 lakh families whose bread-earners have lost jobs owing to the coronavirus-induced shutdown.

For FY21, the government has allocated Tk 100 crore in grants for the Integrated Health-Science Research and Development Fund, Tk 100 crore for recurring micro-credit under the rural social welfare programme and Tk 700 crore for compensation against the coronavirus-related health risks.

Tk 500 crore has been set aside to give cash assistance to the jobless poor affected by the coronavirus and another Tk 100 crore has been allocated to give special allowance to the frontline health staffers.

The provision of Tk 10,000 crore block allocation in the FY21 budget to fight the pandemic in addition to the allocation to the health ministry provides some comfort that funding will be available to meet emergency needs, said Zahid Hussain, a former lead economist of the World Bank Dhaka office.

"However, the government needs to quickly design interventions to meet the known urgent needs to fight the pandemic. There is no reason to sit on these funds because the contingencies are known."

The use of these funds should be limited to health and social protection where the needs are the deepest, he said.

What is lacking is a set of well-designed interventions to meet the known needs, according to the economist.

The government needs to ramp up testing to at least twice the current levels by widening the testing strategies and this requires a variety of testing kits, reagents, storage facilities, laboratories, and trained personnel, among others.

Hospitals in Bangladesh do not have enough beds, intensive care units, ventilators and oxygen. The frontline soldiers do not have enough protective gears, he said.

"Tracing is another area where we have practically done nothing other than making some digital promises. If the health ministry cannot come up with initiatives to ramp up the capacity of the public health system, the government should invite non-state actors to come forward with pandemic fighting initiatives for funding from this allocation."

This block allocation should ideally be used to catalyse initiatives from within and outside the government to meet the urgent health and social protection needs, Hussain said.

The block allocation can also be used to make cash transfers to the old and new poor. It is not necessary to ask the local administration to prepare a list of beneficiaries.

"Identifying the poor is no longer a big challenge. Reaching them would be a big challenge if we continue to rely on the bureaucratic machinery."

Monitoring the use of all funds will be critical, he said.

"The government will be facing serious financing constraints in FY21. Every single allocation from this fund, whether made to state or non-state actors, should be made public in the finance division website with details on how much is allocated to whom for what purpose and the expected results with measurable indicators."

The intermediaries receiving these funds should be required to provide information online on the use of the funds they have received and the results achieved, he said.