Here is how budget outlines to address job crisis
BI Special || BusinessInsider
Millions of people from different sectors in the country lost their jobs due to the global coronavirus pandemic. Photo: Business Insider Bangladesh
Millions of people from different sectors in the country lost their jobs due to the global coronavirus pandemic, accelerating the job crisis that the country has been facing for a long time.
Besides, many migrant workers, key drivers of the country’s economy, are being forced to return home after losing jobs caused by the pandemic.
Resultantly, the jobless people have been struggling to manage their livelihoods—an unprecedented situation that the country never faced before. This is a big challenge for the country to cope with the situation.
With this background, Finance Minister AHM Mustafa Kamal proposed several initiatives in his budget speech in the parliament on Thursday.
“We have discouraged luxury expenditures and prioritized government spending that creates jobs. This is one of the four main strategies of our comprehensive plan for economic recovery amid Covid-19,” he said.
Human resource allocation
Though the budget did not propose to allocate directly for job creation, it announced to increase the allocation for human resource development under its annual development budget (ADP) by Tk 13,444 crore to Tk 66,164 crore.
It was Tk 52,722 crore in the revised budget of FY21.
Among the proposed allocation, the Ministry of Primary and Mass Education will get Tk 8,022 crore, the Ministry of Health and Family Welfare Tk 13,000 crore, the Secondary and Higher Education Division Tk 11,920 crore, and others Tk 33,222 crore.
The total amount is 29.4% of the proposed ADP, which was 26.7% in the last fiscal.
“A large number of students in our country are graduating every year and becoming eligible for employment in the job market. To ensure that these new graduates can easily get jobs in their respective fields, the government will give priority to launch the 'internship programme' for them in both public and private sectors,” the minister said.
To that end, a ‘Policy Framework’ will be formulated in the coming fiscal year for the immediate launch of this internship programme, he said in the proposed budget.
In a bid to generate employment and create new entrepreneurs by extending loans, the proposed budget offered tax exemption for microcredit organizations.
It also proposed a 10 years tax holiday for agricultural entrepreneurs including fruits, vegetables, milk and dairy products, baby foods, and agri-machinery producers and processors.
The proposed budget also suggested a 10 years tax holiday for education and skill development service sectors, IT product and service, and some other sectors.
To promote women’s self-employment, the finance minister proposed tax-free business turnover up to Tk70 lakh for the women entrepreneurs.
Previous initiatives to continue
The minister said the government has already taken several initiatives for job creation.
Besides, the government in association with private stakeholders provides training and skill development programme.
“The government has already taken steps to set up 100 special economic zones, high-tech parks for technological advancement and employment generation,” Kamal said.
What do experts say?
Economists and experts appreciated the proposals made in the budget to address the employment generation challenges but they said it was not enough at all.
“We see a gap in the proposed budget in addressing the job crisis in the pandemic era,” said Selim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM).
“The finance minister tried to formulate a better budget. The budget talked about the employment generation but failed to address Covid-19 induced job crisis,” he added.
“We see the businesses, particularly small and medium enterprises that account for the maximum portion of jobs, have been struggling to recover from the shock of the pandemic. The SME sector failed to get benefits as expected from the government-provided stimulus package,” the SANEM executive director said.
The economist said without the recovery of the businesses, job creation would not get its momentum.
“I think the budget however offered no clear outline for the business recovery,” he added.
Former Revenue Board Chairman Muhammad Abdul Mazid said the proposed budget has a little change from the previous year's budget.
“It however did not say about new steps for the employment generation,” he added.
The government should come up with massive programmes for rapid job creation now but it did not do that, he said, suggesting that in the Covid-19 situation, it could introduce vocational training or technical skill-enhancing programmes for all of the unemployed.
“We notice the people who lost jobs remained unemployed. To utilise them, a big plan was needed,” added Mazid.
“Boosting investment in the economy is the prerequisite to increase jobs and the majority of the investment should come from the private sector,” Centre for Policy Dialogue (CPD) Distinguished Fellow Professor Mustafizur Rahman said.
The proposed budget tried to cheer up the businesses by providing tax facilities, which deserved to get full marks.
“Tax incentive is necessary but not enough,” he said.
Without the implementation capacity, decreasing the cost of doing business, and a good environment, it is impossible to increase investment and employment generations, said Mustafiz.
The government should also consider the factors for a sustainable solution of employment generation, he added.
The leading think-tank in its budget analysis on Friday said allocations for four employment-generation related ministries failed to show any tangible progress.
The overall ADP implementation rate of the four ministries ADP in FY21 was only 44.7% till April 2021, which is frustrating.
“Delayed project implementation means delayed employment generation by crowding-in private investment,” it said.
Moreover, the current level of allocation would not ensure the completion of several crucial carryover ADP projects like the BEPAZA economic zone in Mirsarai even in FY22.
The CPD suggested timely implementation of the projects to reduce the unemployment problem.