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Tk 6.03 trillion budget for FY 2021-22

Main focus on Covid recovery

Published : 01 Jun 2021 09:33 PM | Updated : 02 Jun 2021 01:12 AM

The government has prepared to announce a Tk 6.03 trillion budget on Thursday for the next fiscal year (FY 2021-22), aiming to recover the economy from the shock of Covid-19 pandemic.

Finance Minister AHM Mustafa Kamal will place the budget in the Parliament on June 3.

The GDP growth for the coming fiscal is estimated at 7.2 percent by keeping the industrial sector afloat through incentive programmes .

Officials of the Ministry of Finance said the finance minister is going to declare the budget with the special priority on health, agriculture, social security, employment, food and disaster management to tackle the crisis of Covid-19.

At the same time, the issue of food security will be given special importance in the next budget, they said adding that, there will be special guidelines on ensuring food security for millions of people who are unemployed due to coronavirus.

Various short, medium and long term plans will also be included in the budget to address the economic and social risks posed by Coronavirus pandemic.

According to Finance Ministry sources, the GDP growth target for the next financial year has been set at 7.2 percent. Inflation is targeted to be limited to 5.3 percent this fiscal.

In the budget proposal for 2020-21 fiscal, GDP was estimated at 8.2 percent, but due to the second wave of coronavirus and government-imposed lockdowns it has been reduced to 6.1 percent.

The size of the national budget for the coming 2021-22 fiscal year stands at Tk 6,03,681 crore, up Tk 35,681 crore or 6.28 percent higher than the original budget of the current 2020-21 fiscal year.

Under the Corona situation, for the first time in the last 2019-20 fiscal year, negative growth has been achieved in revenue collection.

Even in the current financial year, the revenue deficit could be around Tk 1 lakh crore. In this context, the target has been set in the review of the revenue collection of the last financial year and the current financial year, according to the Ministry of Finance.

According to sources, the next budget will collect 3.89 lakh crore from internal sources. As a result, the overall budget deficit stands at Tk 2,14,603 crore.

The deficit is 6.21 percent of GDP. The overall budget deficit for the current fiscal year 2020-21 was estimated at Tk 190,000 crore (6 percent of GDP).  As a result, the deficit in the next budget is increasing to Tk 24,603 crore.

Dr Atiur Rahman, former governor of Bangladesh Bank, told Bangladesh Post, “Priority has been given to health, agriculture and poverty reduction in the coming budget to offset the impact of coronavirus in the quickest possible time, it is a very time befitting decision.”  

“The country’s economy progress is good compare to other countries despite covid-19,” he said, adding, “As a result, it will not be difficult to achieve a GDP growth target of 7.2 percent for the next fiscal.”

Zahid Hussain, a former lead economist of the World Bank, said that the government should ensure vaccination for all in the next budget.

Besides, adequate allocations should be kept aside to remove the weaknesses in the health sector, he added.

He mentioned that there should be punitive and incentive measures in the budget with regard to following the hygiene rules in mills and factories.

However, there will be Tk 10,000 crore special allocation for facing the impacts of Covid-19 in the budget.

The social safety net will be expanded with Tk 125,000 crore which is 30 percent higher than the current fiscal.

Meanwhile, the government has approved the Annual Development Programme (ADP) involving Tk 225,324 crore for 1,426 projects for the 2021-22 fiscal year with focus on transport and communications, power, housing, education and health sectors. Besides, Tk 11,469 crore was allocated for autonomous entities.

Of the Tk 225,324 crore, Tk 137,300 crore will come from internal sources while Tk 88,224 crore from foreign sources.  Of the Tk 11,469 crore of the autonomous entities, the internal sources will provide Tk 6,717 crore while the foreign part will be Tk 4,751crore.