The budget, poverty alleviation and missing links

This year is the first year of the implementation of the National Poverty Reduction Strategy . The government has finalised the full blown poverty reduction strategy titled " National Strategy for Accelerated Poverty Reduction -- Unlocking the Potential". In fact, this is the national document on which all development initiatives and priorities should be based, designed and targets to be achieved.

The total size of the budget , development and non-development together as proposed will be Tk 69,740 crore which is ever highest in the country. It has also been estimated that the GDP growth will be 6.71 per cent and per capita income of the population will be US$482 which are optimistic, at the same time encouraging . The budget proposal contains 56.3 per cent of the total allocation for initiatives and approaches directly and indirectly related with poverty reduction. This is also a sizeable allocation provided it reaches to the poor .

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The frequently asked question is whether this budget could be termed as consistent with the pro-poor strategy designed to achieve the visions of Millenium Development Goals. Whether inflation rate of more than 7.4 per cent as observed will affect the life-style of the rural population. The question was also raised whether the fiscal measures suggested to reduce the prices of essential items would be meaningful ones when no specific proposals were suggested to control the cartel of hoarders and unscrupulous traders.

A few measures, of course, might have positive impact on rural economy and poverty alleviation like Tk.1200 crore subsidy to agriculture and proposed withdrawal of Infrastructure Development Surcharge . The budget of the Ministry of Agriculture has been increased by 42 per cent to provide significant support to the farmers .The withdrawal of duties and taxes on capital machinery , accessories and agro-inputs will obviously help rural non-crop sector to poverty alleviation by creating waged employment in rural areas. The benefit of subsidy of 25 per cent on the import of fertiliser as announced in the budget of 2005-2006 could not reach to the farmers at all . On the other hand, crisis of fertilizer continued with the inadequate supply of low quality fertilizer generating much discontent among the farmers. Almost similar situation was observed in the case of Agro-based Industries Assistance Programme. The budget proposal for raising the allocation of Tk.150 crore would definitely benefit the Small and Medium Enterprises provided the system for the same is made transparent and accountable.

The social safety net proposals as experienced helped the rural population tremendously in the past. The proposal made in this budget for widening the social safety nets to meet the requirements of the hapless and underprivileged populace will obviously help the poverty alleviation programme. Enhancing the rate of "Senior Citizens Allowance" to Tk 200 and raising the number of beneficiary to 16 lakh and also the allowance for destitute, widowed women to Tk. 200 and increasing the number of beneficiaries to 6,50,000 are commendable initiatives . The “Seasonal Unemployment Reduction Fund", created in 2005-2006 under non development budget to mitigate the miseries of unemployment of poor and distressed populace in Monga areas of North Bengal was found to be a positive step to address the hunger and acute poverty at particular season. The allocation under this head, although raised to Tk 55 crore does not appear to be sufficient to address the situation as experienced in the past. .Equally the Fund for Housing of Homeless to help ease housing problem of homeless rural families is inadequate to address the problem.

The unfortunate missing links for poverty alleviation are inadequate provisions or no specific proposal for a few categories of poor like, 1] Landless poor, 2] Marginal farmers and non-crop farmers, 3] Indigenous population, 4] Population in hard to reach areas .

The number of landless poor is increasing with the growth of population. The continuos soil erosion, grabbing of land by local influentials and politicians, neglect by land official of the poor in the lease of Khas lands etc are major reasons of landlessness. In addition , private sector big farming initiatives eventually grabbed the very small properties of the poor alluring them with higher prices. There is no proposal to implement the declared policy of the government to provide the Khas land to the poor . Practically, major portion of the Khas land under government account, is under the occupation of local leaders and musclemen. There is even no visible initiative for distribution of newly emerging Char land to the poor.

The budget is absolutely silent on this issue . The percentage of landless poor was 15 per cent at the time of liberation of Bangladesh. It has now reached to more than 30 per cent as estimated conservatively. Unless this problem of landless poor is addressed adequately, the success of the poverty alleviation strategy will remain a far cry.

The budget is also almost silent about the grabbing of properties of indigenous population and their involvement with the mainstream of economic activities of the country. There is also inadequate proposal for marginal farmer and their employment with the non- farm activities in off season.. The population of hard to reach areas remain absent in the budget except to address them during disaster and natural calamities with relief and by opening gruel kitchen.

DFID has initiated Char Livelihood Project to address the question of economic wellbeing in char areas . Government might also initiate a modest beginning to address the poverty of population living in hard to reach areas.

In fact, poverty reduction shall remain as top priority strategy in Bangladesh for coming years . The budget proposal and the project initiatives should be significant and meaningful to address the problem of poverty in letter and spirit . The trading in the name of poverty alleviation would stop provided strategic approaches taken are people oriented and transparent involving the stakeholders at large.

Dhiraj Kumar Nath is a freelance contributor.