How the FY24 Budget can aid marginalised communities of Bangladesh

Representational image. Photo: Mumit M/TBS

Daily newspapers in the country are now flooded with advance information about the soon to be declared national budget. Tax rebates and new tax imposition are the talk of the town. Seminars and dialogues at different levels are being held almost every day. 

However, very few of them focus on the marginalised communities despite them being a significant proportion of the population. A recent BIDS (Bangladesh Institute of Development Studies) study found that a large portion of the new poor come from marginalised communities even though the overall poverty rate is declining. 

That is not to say that the government of Bangladesh does not have any plans for them. For instance, the 8th Five Year Plan (FYP) mentioned a strategy for the marginalised group (p 845), while the 7th FYP also had plans for Dalits. The 8th FYP also discusses the condition of sex workers. 

Several arrangements were supposed to be made for these marginalised communities such as special quota for Dalits and extremely poor groups for their education. 

Local government institutions, i.e, Upazila and Union Parishad along with NGOs, were going to be involved in locating the disadvantaged Dalit people. Moreover,  the Ministry of Land was supposed to prioritise these communities while allotting khhas land for settlement under asrayan-type housing projects. 

Promises were made to provide legal aid for marginalised communities, increase the number of border haat (special markets located on the zero line between India and Bangladesh) from four to 16, ensure quality education for marginalised communities, ensure financial inclusion and to favour marginalised communities in allotment policies of affordable colonies. 

To reach these communities, 26 District Information Offices of the Department of Mass Communication and District Information Complex will be built by 2025 and the remaining 42 offices by 2030 (p 699). There are plans to launch char areas' WASH facilities and distribute microcredit among these communities.

Tea garden workers, another marginalised community in Bangladesh, can also avail this facility. The government will form a special commission to provide key recommendations on improving the socio-economic conditions of Dalit communities and Dalit households will be given preferential access to social security programmes.

A CPD (Centre for Policy Dialogue) study also identified some very important areas for the marginalised class. In their report, they suggested an announcement regarding children's budget, addressing vulnerable conditions of private sector teachers, disabled persons, transgender, ethnic minority communities, farmers, transport sector workers, the announcement and implementation of a gender-friendly budget etc.

A clear definition for marginalised communities also needs to be announced so that people who are socially and economically excluded from their society, living under a different socioeconomic status, with specific ethnocultural identity, age, or other stigmatised identities, forced by mechanisms of oppression, patriarchy, or stigmatisation through the means of economic, psychological, and social aspects are included. 

The budget for this year would be Tk7.59 trillion and the budget for the annual development programme will be Tk2.63 trillion. However, the budget for the Social Safety Net Programme (SSNP) is not known yet. 

In the budget for FY22, out of Tk39.63 billion, the old age allowance was only 8.69%. At the same time, the pension for retired government employees and their families constituted 67.34%, and for freedom fighters, the allotment was about 13%. 

Moreover, the allowance for widows and destitute women was 3.77%, the allowance for financially insolvent was 4.59%, and for transgender communities, it was only 0.12%. This allocation strategy disproportionately benefits specific communities over others and needs to be rethought.

In the income-tax schedule, women, elderly, and transgender communities are separately mentioned as people who would receive some extended exemptions while submitting income-tax return files. There should be a separate ceiling for marginalised people for a certain period, it can be up to Tk4.50 lakh.

There is an income tax rebate for companies employing a certain percentage of marginalised and disadvantaged people. Presently, it is allowed only for third gender but it can be extended to all marginalised classes of people. There is a VAT exemption of up to Tk70 lakh turnover for female entrepreneurs. A separate slab can be announced for marginal people.  

Social Safety Net Programme and gender budget have been announced by the government for implementation of several projects. Separate specialised education and training programmes need to be included for marginalised people. 

The climate-affected migrant group may need to be treated specially. The gender budget is being looked after by 44 ministries and agencies. A good coordination mechanism has to be established so that implementation is good. 

In-country returnee migrants and MSMEs (Micro, small and medium enterprises) especially in southwest Bangladesh need special attention.  A brief study of BUILD shows that they cannot afford small pieces of land because of collateral. 

Those households which have access to some small assets such as a pond or an auto-rickshaw often need some stop-gap cash support to activate income-generating activities e.g through the purchase of fingerling or a battery for the auto-rickshaw.  Because of Covid-19, many members of such families have lost their jobs and could not get back to their earlier situation. 

In the meantime, we have received a detailed prescription from the IMF (International Monetary Fund) on revenue mobilisation, public spending efficiencies, public financial management, monetary and exchange rate and financial sector policy. Their suggestions may help increase governance, improve collection, tax and expenditure-related issues and help streamline the Sustainable Public Procurement Policy (SSP).  A draft SSP has already been prepared. 

The SSP should focus on sourcing from women-owned and women-led businesses and other disadvantaged groups and/or sourcing from businesses/organisations which employ women (50% or more), persons with disabilities, youth, and people from disadvantaged backgrounds. It should also ensure equal rights of members from other disadvantaged groups, decent pay, safety in the workplace and compliance with the labour laws of Bangladesh. 

Ferdaus Ara Begum is the CEO of BUILD, a public-private dialogue platform for private sector development.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.