General

Kamal to stick with expansionary scope of budget, but expand slower

The country is likely to get a Tk 593,314 crore budget for 2021-22 fiscal, Tk 25,314 crore higher than the running one, aiming to face the COVID-19 pandemic challenge and recovering the economy.

According to Finance Ministry sources, the process to formulate the budget has started.

The meeting of the coordination council on budget management and financial and currency exchange rate was held virtually recently with Finance Minister AHM Mustafa Kamal in the chair.

The budget size for the current 2020-21 fiscal was fixed at Tk 568,000 crore. Considering that, the size of the budget would increase by 4.4 percent – a smaller increase than what successive AL-led governments have gone for since assuming power in 2009.

The budget for the current fiscal is 13.2 percent larger than the one for 2019-20, which itself was 18.2 percent bigger than the one for 2018-19.

Sources said that the priority sectors for facing the challenge of pandemic and recovering the economy are health, investment, production, employment, human resource development, poverty reduction and strengthening food security.

Finance Minister AHM Mustafa Kamal is likely to place the national budget in the first week of June, if everything goes well.

On different occasions he said that life does not stand still due to the COVID-19 pandemic, rather the country has to reach its desired position facing all hurdles.

He mentioned that in the next fiscal many prioritised projects will be at the final stage and there will be no relaxation in money disbursement for those projects apart from new allocation. Besides, for revenue collection the concerned offices will be more active to fulfil their targets.

As per the Finance Ministry sources, in the new budget there will be new programmes and necessary allocation with directives for ensuring employment opportunities.

In the next budget there will be proposals to attract local and foreign investments.

“Above all, the budget for 2021-22 fiscal will be formulated as per the line of 8th Five Year Plan,” a senior official of the Finance Ministry said.

Sources said that the size of the budget was estimated at Tk 600,000 crore, but later it was reduced to Tk 593,314 crore.

The estimated revenue target has been fixed at Tk 383,700 crore which is Tk 1687 crore higher than the current fiscal. This target is 10.8% of the GDP.

The meeting also proposed Tk 206,061 crore budget deficit- an estimated 5.8% of GDP. The gDP growth for the next fiscal has been estimated at 7.7%, down from 8.2% for the current one.

The estimated inflation for the next fiscal year was proposed 5.3% which is 5.4% in the running fiscal. Besides,the GDP for the next fiscal has been proposed to 35,52,778 crore while the estimated investment for the next fiscal is 32% of the GDP.

Finance Ministry sources said that the size of the annual development programme (ADP) is likely to be Tk 213,000 crore which is 6% of the GDP and 10% higher than the previous one.

The size of the new ADP is the preliminary proposal of the Finance Minister and the Planning Ministry would make the final proposal in the first week of May, which will be approved in the ECNEC meeting to be held within May second week.

The Finance Ministry sources confirmed that the government is going to put emphasis on nine matters, including successful implementation of Prime Minister announced COVID-19 stimulus packages and ensuring additional allocation in the health sector with incentives and compensation, while formulating a budget for the 2021-22 fiscal.

The other prioritised pockets for the next fiscal is likely to be ensuring monetary allocation for government’s priority sectors to face the effects of coronavirus pandemic, agricultural mechanisation and seed incentives, agricultural rehabilitation and continuation of subsidy in fertilisers for additional food production, and massive employment creation and rural development.

Expansion of social safety net programme, house building for homeless poor people (main focus of Mujib Borsho) and carry on the distribution of food among the low income group free of cost of minimum cost would also get priority in 2021-22 fiscal budget.

Besides, overall human resource development including education and skill development will get focus.

The Finance Ministry has decided to prioritise these matters considering the ongoing COVID-19 pandemic.

Apart from these the allocation for the Padma Multipurpose Bridge will be increased to complete it within the stipulated time.

Sources said that comfortable tax and VAT policy will be maintained in the budget for 2021-22 fiscal, taking the debacle in trade and weakened business situation caused by the pandemic into consideration.

The second perspective plan to implement Vision 2041 following the footsteps of Vision 2021 will be started from the next fiscal.

Some one crore people will be brought under the social safety net programme to help overcome their financial losses due to the COVID-19 pandemic.