Staff Reporter :
Finance Minister AHM Mustafa Kamal will place the proposed national budget for 2020-21 fiscal year in the Parliament today amid economic downturn caused by the COVID-19 outbreak.
The size of the proposed budget could be some Tk 556,978 crore and the total revenue collection target to be around Tk 3, 95,000 crore, according to draft budgetary estimation.
Kamal will place the national budget in the parliament at 3:0 pm.
The budget session begun on Wednesday afternoon amid various restrictions of the coronavirus pandemic in the country.
The 8th session of the 11th Parliament began at 5:00pm on Wednesday with Jatiya Sangsad Speaker Dr Shirin Sharmin Chowdhury in the chair.
Finance Ministry officials said the new budget would see a deficit of 6 per cent of the GDP for the first time instead of 5 per cent that put in practice for the decades.
In monetary figure, the amount of deficit in the new budget would be Tk 1.90 lakh crore, much of which would come from bank loans and borrowings from external sources.
The government is likely to borrow about Tk 85,000 crore from the banking system and Tk 76,000 crore from the donor agencies to meet the record deficit.
Officials said the government already sought more than $4.5 billion in soft loans from donors and development partners to tackle the budget deficit in the outgoing and next financial years.
According to finance ministry officials, the overall revenue target is likely to be fixed at Tk 3.78 lakh crore, of which Tk 3.30 lakh crore will be collected by the National Board of Revenue (NBR) and Tk 48,000 crore from non-tax revenue.
NBR Chairman Abu Hena Md Rahmatul Muneem said in a letter to Finance Secretary Abdur Rouf Talukder last month said it can manage at best Tk 2,50,000 crore next fiscal year.
The National Economic Council (NEC) already approved the Annual Development Programme (ADP) of Tk 205,145 crore for 2020-21 fiscal giving priorities to transportation, education, and health and agriculture sectors.
On the other hand, non-development expenditure will be Tk 362,945 crore.
The budget is likely to project an 8.2 per cent GDP growth for the upcoming fiscal year.
The World Bank has projected only 1.6 per cent GDP growth in the outgoing fiscal year due to the pandemic fallout. Moreover, it may also witness drastic declines to 1 per cent in the coming fiscal year.
The Washington-based global lender released the hard-hitting forecast on Monday in its June 2020 Global Economic Prospects.
Bangladesh last witnessed a less-than-three-per cent GDP growth (2.83 per cent) in 1989-90 due to a devastating flood.
“Achieving an 8.2 per cent GDP growth target in the next fiscal is almost impossible given the prevailing situation of the economy. The target is just ambitious and not based on good homework,” Dr AB Mirza Azizul Islam, former adviser to the caretaker government told The New Nation.
He, forecast the pandemic-hit economy has little chance of bouncing back before January. So, it hit the growth prospects.
Officials involved in budget preparation said, education and technology sector would get the highest allocation in the new budget followed by transport and communications sector and interest payments on domestic and external debts.
The total allocation for these three sectors would stand at Tk 214,148 crore, which is 37.70 per cent of the total budgetary outlay.
The health sector, which came to spotlight in the wake of the coronavirus pandemic, will witness a 23.44 per cent or Tk 5,554 crore increase in budgetary allocation in the next fiscal year, compared to the revised budget for FY 20.
Earlier in FY2010-11, the health sector was given an allocation equivalent to 5.76 percent of the total budget.
The education and technology sector will get the highest Tk 85,760 crore allocation in the upcoming budget, which is 15.10 percent of the total outlay. In the original budget for the current fiscal year, the education sector had been allocated Tk79,486 crore, which was reduced to Tk77,039 crore in the revised outlay.
The transport and communications sector is going to get Tk 64,587 crore, which is 11.37 percent of the total expenditure. The sector is going to see a Tk 6,091 crore increase in allocation from Tk 58,496 crore in the revised budget for the current fiscal year, but the allocation is Tk242 crore less than that given in the original budget for FY20.
The new budget is likely to set side the third highest allocation of Tk 63,801 crore for the payment of interests of domestic and foreign loans.
“Fixing the corona-hit economy would be big challenge in the upcoming fiscal year. The economic outlook becoming increasingly grim as health risks have overshadowed business activities, jobs, investment and implementation of mega projects,” Ahsan H. Mansur, Executive Director, Policy Research Institute, told The New Nation.
Citing media reports, he said the government is likely to set lofty budgetary targets–income, expenditure and GDP growth-in the next fiscal year, and those targets are not ‘realistic and achievable’.
However, officials said there would be some programmes in the upcoming budget to recover the economy from the coronavirus effects and to rehabilitate affected industries and poor people.
On May 18 last, President Abdul Hamid summoned the session (Budget Session for 2020-21FY) exercising power bestowed upon him by Article 72 (1) of the Constitution.
Given the situation caused by the outbreak of Covid-19 pandemic, this time the parliament session will run with some restrictions and conditions in force.
