Tk 568,000 crore budget passed

'Economic Transition and Pathway to Progress' main motto

The Jatiya Sangsad (JS) on Tuesday passed a Tk 568,000 crore budget for 2020-21 fiscal year, targeting 8.2 percent GDP growth, protecting people and recovering from the economic losses amid COVID-19 pandemic.

This time, the budget’s slogan is ‘Economic Transition and Pathway to Progress’.
This is the second budget of the Finance Minister AHM Mustafa Kamal and the 12th consecutive budget of the Awami League government.

The new fiscal year will start from today (Wednesday).
The finance minister moved the Appropriations Bill- 2020 seeking a budgetary allocation of Tk 7,59,642.44 crore which was passed by voice vote.

The ministers and divisions placed some 59 demands for grants for meeting recurring, development and charged expenditures during the current fiscal year (FY) 2020-21.

Earlier, Parliament rejected by voice vote a total of only 421 cut-motions that stood in the name of opposition members on 59 demands for grants for different ministries.

A total of nine MPs from Jatiya Party and BNP submitted their cut-motions on the budget. They are– Kazi Firoze Rashid, Mujibul Huq, Fakhrul Imam, Pir Fazlur Rahman, Shamim Haider Patwari, Liaquat Hossain Khoka, Begum Rawshan Ara Mannan, Harun Ur Rashid and Rumeen Farhana.

They, however, were allowed to participate in the discussion on Law Ministry and Health Ministry.
Later, Speaker Dr Shirin Sharmin Chaudhury applied guillotine to quicken the process of passing the demands for grants for different ministries without giving the lunch break.

Opposition and independent MPs were present at the House when the Appropriations Bill was passed in parliament and they did not raise any voice against passing of the bill.

Earlier, the Finance Minister AHM Mustafa Kamal on June 11 placed a Tk 568,000 crore (5.68 trillion) budget for 2020-21 fiscal year in the Jatiya Sangsad with a comprehensive plan that includes four main strategies.

The budget outlay has increased by Tk 44,810 crore, or around 7.9 percent, from the outgoing FY. The previous FY’s budget was around Tk 523,190 crore.

About the main four strategies, the government will discourage luxury expenditures and prioritise government spending that creates job.

Secondly, the government is creating loan facilities through commercial banks at subsidised interest rate for the affected industries and businesses so that they can revive their economic activities and maintain competitiveness in home and abroad.

The third strategy is to expand the coverage of the government’s social safety net programmes to protect the extreme poor and low paid workers of informal sector from the sudden loss of their source of earning due to pandemic.

Finally, the government will increase money supply to the economy while making a delicate balance between increased money supply and possible inflationary pressure.

The revenue collection target for the coming FY is Tk 378,000 crore.
Of the amount, the National Board of Revenue (NBR) has been asked to realise a revenue collection target of Tk 330,000 crore while the non-NBR revenue collection target is Tk 15,000 crore and the non-tax revenue collection target is Tk 33,000 crore. Besides, Tk 4,013 crore will come from foreign grants.

The overall budget deficit will be Tk 190,000 crore, which is 6 percent of GDP.
It is to be noted that deficit stood at 5 percent in the last fiscal year.

Out of the total deficit, Tk 80,017 crore will be financed from external sources, while Tk 1,09,983 crore from domestic sources of which Tk 84,983 crore will come from the banking system and Tk 25,000 crore from savings certificates and other non-bank sources.

Total allocation for operating and other expenditures is over Tk 3,62,855 crore (3.62 trillion), and allocation for the annual development programme (ADP) is Tk 2,05,145 crore (2.05 trillion).

The allocation proposed for the social infrastructure sector in the next budget is Tk 1,55,536 crore, which is 27.38 percent of total allocation, in which the allocation for human resource sector (education, health and other related sectors) will be Tk 1,40,222 crore.

The proposed allocation for the physical infrastructure sector will be Tk 1,67,011 crore or 29.40 percent, in which Tk 69,553 crore will go to overall agricultural and rural development, Tk 61,435 crore to overall communications, and Tk 26,758 crore to power and energy.

A total of Tk 1,40,265 crore has been proposed for general services, which is 24.69 percent of the total allocation. An amount of Tk 36,610 crore is proposed for public-private partnerships (PPP), financial assistance to different industries, subsidies and equity investments in nationalised corporations, banks, and financial institutions, which is 6.45 percent of the total allocation.

Another amount of Tk 63,801 crore has been earmarked for interest payment, which is 11.23 percent of total allocation, and Tk 4,777 crore for net lending and other expenses, which comprises 0.84 percent of the total allocation.

As per the ministry and division-wise allocation, the Local Government Division received a proposed budgetary allocation of Tk 36,103 crore, followed by Tk 34,842 crore to the Ministry of Defense, Tk 29,442 crore to the Road Transport and Highways Division, Tk 24,853 crore to the Power Division and Tk 6,362 crore to the Ministry of Health and Family Welfare.

Tk 22,884 crore has been allocated for improvement of the health sector while different programmes worth Tk 5,500 crore will be implemented under the Health Services Division to combat the Covid-19 pandemic.

In order to fulfill the emergency requirements, Tk 10,000 crore lump sum amount has been allocated to fight against Covid-19.
To ensure better social safety net during and after the Covid-19, the proposed budget has been allocated Tk 95,574 crore in the social security sector, which is 16.83 percent of total budget and 3.01 percent of GDP in FY2020-21.

The finance minister proposed allocating Tk 24,937 crore for the primary education sector, Tk 33,118 crore for the secondary and higher education sector and Tk 8,344 crore for technical and madrasa education.

He also proposed allocating Tk 15,442 crore for the agriculture sector in the next fiscal year.
Earlier on Monday, the JS passed the Finance Bill-2020 with some changes.

This is country’s 49th budget and the 21st of the Awami League (AL) government in five terms while Tajuddin Ahmed presented the first budget as the finance minister of the post-independence Bangabandhu Government in 1972.