Govt must shrug off pro-rich bias in stimulus disbursement

Published: 00:00, Nov 28,2020

 
 

ABOUT 31.72 per cent of a Tk 200 billion package, which accounts for Tk 63.46 billion, meant for small and medium enterprises to cope with economic shocks of the COVID-19 outbreak has, as of October 31, been disbursed while a whopping 70.87 per cent of a Tk 400 billion package, which accounts for Tk 283.48 billion, meant for big industries has been disbursed till October. While both the packages  account for almost a half of the 21 stimulus schemes that the government has announced in phases since April to tackle the economic fallout of the COVID-19 outbreak, the disbursement so far accounts for about 45 per cent, or Tk 557.95 billion, of the total packages of Tk 1,210 billion. The figures show that the disbursement is far more in cases of influential quarters or big industries that could make their voices being heard and could strongly put forth their demands while the disbursement has failed to make a significant mark in cases of not-so-powerful quarters or small and medium industries. Disbursement under other such packages for low-income people, farmers and workers in the informal sector has also been not that significant, as New Age reported on Friday, keeping to an update that the finance ministry gave at a dialogue held on Thursday on the stimulus package for sustainable and inclusive recovery from the COVID-19 fallout.

The ministry update shows that the apparel sector has received the entire Tk 50 billion allocation for a 2 per cent service charge and Tk 55 billion more of the Tk 400 billion fund meant for large industries. Specialised government banks have so far disbursed Tk 4.28 billion for the rehabilitation of workers who returned from abroad and affected small businesspeople in rural areas from a package of Tk 32 billion. Guidelines on the disbursement of Tk 15 billion to affected and retrenched workers and the disbursement of Tk 20 billion to cottage industries and micro-entrepreneurs are yet to be completed. While a former Bangladesh Bank governor seeks to doubt that the benefits of the stimulus packages based mostly on bank credits would reach the intended people, he also puts the poor state of disbursement down to the Bangladesh Bank and the reluctance of commercial banks, said to be favouring influential quarters. The proposition at hand does not bring to the fore a pro-rich bias only of the banks but also of the government that should be attended to and rectified immediately if the government wants the stimulus packages to pay dividends. There has also been a proposal for the institution of an independent review panel to deal with any bottlenecks that hold back the disbursement by commercial and specialised government banks as needed.

In view of any second wave of COVID-19 and in cases where the stimulus schemes already announced are not adequate to mitigate the impact of the breakout of the disease, the government may well consider putting more capitals in such packages, but the government must immediately deal with the disbursement issues. The government has earlier sounded warnings for the banks to complete the disbursement, but it has not happened, especially not in cases of the beneficiaries that are not much powerful and vocal. The government and the banks must shrug off the pro-rich bias to benefit the poor.

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