PETALING JAYA: MIDF Research views the increased allocation for development expenditure under Budget 2021 as a positive move by the government in the midst of the country’s economic recovery.
Of the RM322.5bil total allocation, about RM69bil will go towards the development expenditure compared to RM56bil under Budget 2020.
“We believe that it is important the development expenditure continues to be channelled to programmes and projects with high multiplier impact.
“Projects such as upgrading, expansion and maintenance of transportation networks and projects such as the Electrified Double Track Gemas – Johor Baru rail project, Pan Borneo Highway, Klang Valley Electrified Double Track Phase 1, Rapid Transit System as well as the expansion of Kuantan Port and airport in Sandakan will give the impetus for the recovery to the economy, ” the research house said in a statement yesterday.
MIDF Research also opines that Budget 2021 reflects the government’s commitment to provide support to the bottom 40% (B40) population impacted by the Covid-19 pandemic.
Among the measures under the budget targeted towards the households are the expansion of the social protection “Perlindungan Tenang Voucher Programme”, assistance to children of poor families as well as the replacement and improvement of cash handout programme “Bantuan Sara Hidup” to “Bantuan Prihatin Rakyat”.
In addition, the government also provided initiatives to ease the burden of middle 40% (M40) population such as reduction of income tax for taxable income range of RM50,001 to RM70,000, reduction of contribution rate for the Employee Provident Fund (EPF) and the withdrawal of EPF Account 1 for targeted group.
As for the business community, MIDF Research points out that steps taken under Budget 2021 will ensure that businesses, especially the small and medium enterprises, will be able to not only sustain but thrive under present economic conditions.
“Various measures to drive investment in technology, supply chain, logistics and sustainable development and assistance to encourage the manufacturing as well as the consumption of domestic made products would foster a more conducive business environment.
“These activities would contribute towards creation of new job opportunities.
“In tandem with the various initiatives on employment, we believe that this will ensure that employment will return on its growth path, ” says the research house.
On the government’s decision to raise the Covid-19 fund ceiling under Budget 2021 to RM65bil from RM45bil earlier, MIDF Research says it will provide the government with much-needed funds to continue to combat the pandemic, considering that the war on Covid-19 is yet to be over.