The government has unveiled a little-over-Tk 6 trillion national budget for the next fiscal year, beginning on July 1, laying special emphasis on recovery of the economy which has been battered by the coronavirus pandemic.
Finance Minister AHM Mustafa Kamal placed the annual outlay of the government expenditure for fiscal year 2021-22 in the national parliament on Thursday – his third budget in a row.
The proposed budget amounting to Tk 603,681 crore (6,036.81 billion), the biggest-ever in the country’s history, is about 6.34 percent higher than the current FY’s original outlay and about 12 percent than the revised outlay.
For the current FY, the original budget was Tk 568,000 crore and revised outlay Tk 538,983 crore.
The budget for the next FY sees a record expenditure-revenue deficit of Tk 214,681 crore or 35.56 percent while the deficit in percentage of GDP stands at 6.2.
The finance minister revealed the plan to cover the deficit by borrowing from domestic and foreign sources -- Tk 97,738 crore from foreign sources and Tk 113, 453 crore from domestic sources. The deficit in percentage of GDP was 6 in the current FY’s original outlay and 5.5 in FY 2019-20.
The budget has projected a 7.2 percent GDP growth and 5.3 percent inflation. In FY21, the government set a GDP growth target of 8.2 percent which was later revised to 6.1 percent amid the coronavirus pandemic.
Prime Minister Sheikh Hasina attended the Thursday’s session presided over by Speaker Shirin Sharmin Chaudhury while lawmakers attended it wearing face masks and gloves and maintaining physical distancing.
Earlier, President Abdul Hamid earlier authenticated the budget bill following its approval by the cabinet.
In the budget speech, the finance minister proposed special arrangements to prevent the spread of the coronavirus and tackle its impact on the economy.
“Through this budget, we will undertake initiatives to combat the impact of the second wave of the COVID-19 pandemic and its long term impacts…” he said.
The coronavirus pandemic, which has kept its onslaught since early 2020, has already taken a heavy toll on the economy, particularly employment and manufacturing.
The slow pace in revenue collection in the current FY due to the pandemic has prompted the finance minister to make a conservative revenue growth projection.
He has fixed an NBR revenue collection target at Tk 330,000 crore, the same target he set for the current FY. The non-NBR revenue has been fixed at Tk 16,000 crore and non-tax revenue at Tk 43,000 crore for the next FY against Tk 14,999 crore and Tk 33,000 crore respectively for the current FY. The total revenue receipt target stands at Tk 389,000 crore against Tk 378,000 crore for the current FY.
Setting a 7.2 percent GDP growth target for the new fiscal year, the finance minister said, Bangladesh had set a growth target of 8.2 percent in FY 2019-20, but the economy took a big hit at the end of the fiscal year due to the pandemic.
The minister has proposed to keep the individual tax rate unchanged at Tk 300,000 in the proposed national budget for the fiscal year 2021-22. The ceiling of annual tax-free income was raised to Tk 300,000, from Tk 250,000, in the current FY budget for decline in personal income due to the pandemic.
The new budget has proposed an expansion in the social safety net programmes by increasing the budgetary allocation by 12.5 percent with the view to alleviating the plight of lower-income and vulnerable groups hit hard by the pandemic.
The minister allocated Tk 107,614 crore for social protection, which is 17.83 percent of the proposed budget and 3.11 percent of the GDP. The figure was Tk 95,500 crore in the current year's revised budget.
"Due to the outbreak of the COVID-19 pandemic, people from all walks of life have to follow the hygiene rules to save their lives. As a result, many low-income workers and people engaged in informal works have become unemployed," Kamal said.
The government is taking various steps to widen the coverage of the social safety net to protect the country's poorest segment from unemployment and loss of income due to the pandemic, according to him.