The government is going to place the budget for fiscal year 2020-21 today (Thursday), giving highest priority to recover from country’s shaken economy due to the crisis caused by the worldwide Covid-19 pandemic.
The draft budget has also emphasized on development of health, agriculture and rural sectors. It also gives priority on implementing mega projects to build a stronger economy and get prepared to tackle any probable future financial crisis.
A senior official of the finance ministry said that the Finance Minister AHM Mustafa Kamal is scheduled to place the budget in the parliament today at 3pm.
The draft of Tk 568,000 crore budget would have a Tk 3,81,016 crore revenue collection target. It would be aimed at reviving the economy already showing negative impact.
The size of the budget for the fiscal 2020-21 is 8.56 percent higher than the previous year.
With a 8.2 percent GDP growth target, the budget is expecting to open up a new horizon for Bangladesh through some special initiatives amid Covid-19 pandemic situation.
The government believes that the upcoming budget will address all the obstacles faced during the corona crisis.
Finance Minister AHM Mustafa Kamal after placing the proposed national budget will move the Appropriations Bill, seeking a budgetary allocation of Tk 568,000 crore which will have to be passed by voice vote.
The size of Annual Development Programme (ADP) has been set at a Taka 2,05,145 crore in the draft budget.
Out of the total ADP outlay, Taka 1,34,643 crore will come from the local sources while Taka 70,502 crore from the foreign sources.
Besides, according to the allocation in the budget Tk 38688 crore has been allocated for subsidy and incentive packages and Tk 27706 crore for pension and gratuity.
Apart from these, Tk 63801 crore has been allocated for loan and Tk 27961 crore for investment in share and equity sector.
Sources in the finance ministry said the education sector is going to get the highest allocation in the upcoming budget with Tk 85,760 crore.
Finance Minister said the government has taken many initiatives in the next budget to overcome the economic losses caused by Covid-19 pandemic.
Facing the ongoing and post Covid-19 pandemic situation, the national budget for the fiscal 2020-21 will create new employment opportunities.
After bouncing back from the COVID shocks, the GDP growth could return to its impressive trend as the government was expecting 8.2 percent expansion in the next fiscal, the minister mentioned.
However, the budget deficit is projected to be Tk1,85,984 crore, which is 5.8 percent of the GDP that is going to cross the 5 percent benchmark after a decade.
The government has primarily set about Tk 82,421 crore borrowing target from banks, Tk 76,004 crore from foreign sources and the remaining from savings and others.
Besides, the rate of inflation is likely to be set at 5.4 percent for the next fiscal, in anticipation of a normal supply of commodities and a stable market.
Of the Tk523,190 crore national budget for the current fiscal year, the overall budget deficit was Tk145,380 crore, which is 5 percent of the GDP.
In the next budget, the National Board of Revenue (NBR), country’s central authority for tax administration, has set the revenue collection target of Tk 3,30,000 crore in the upcoming fiscal 2020-21.
The main target of NBR in the current fiscal year was 3,25,600 crore. This target has been reduced to Tk 3,00,500 crore due to non-collection of revenue at the desired rate.
Former governor of Bangladesh Bank Dr Atiur Rahman said, "Health expenditure must get the top priority in the upcoming budget, followed by investment in agriculture."
He also said that the health sector should get 20 percent share of the total budget for next three years (currently it has less than 5 percent).
Rahman said, “This additional allocation will be required to prepare the health infrastructure to cope with the pandemic, as well as to continue other critical health services.”
He further said, “Share of the social safety net allocations in the total annual budget needs to be doubled, from 10 percent of the total budget to 20 percent in order to safeguard the poor from socio-economic shocks caused by the pandemic.”
He urged the government to focus on agriculture sector more to ensure food security.
“Without efficient implementation and managing of the budget effectively, all works will go in vain,” he said adding that the government must continue dialogues and cooperation with the private sector, the non-government organisations and the international development partners for reviving the economy.
However, this will be Kamal’s second budget to be placed in parliament as he became the finance minister nearly two years ago.
The Finance Minister is scheduled to hold as well a post-budget press conference on June 12 through video conferencing.
