Kazi Zahidul Hasan/Al Amin :
Finance Minister AMA Mustafa Kamal will place the proposed budget for the fiscal year (FY), 2021-2022, in the Jatiya Sangsad (JS) today (Thursday) amid economic slowdown and challenges triggered by the ongoing Covid-19 pandemic.
The budget session of the JS began on Wednesday, with a limited number of MPs.
The total outlay of the proposed budget is likely to be at the level of Tk 6,03,681, up by 6.33 per cent or Tk 35,000, over that of the original budget of the outgoing fiscal (2020-21).
The total allocation for operating and other expenditures for the forthcoming fiscal has been fixed at Tk 3,61,500 crore, while the capital expenditure has been fixed at Tk 2,37,078 crore, including an outlay of Tk 2,25,324 crore earmarked under Annual Development Programme (ADP).
Of the total operating expenditure, Tk 67,679 crore has been set aside for debt servicing purpose, up 6 percent year-on-year, according to finance ministry officials. Out of this, Tk 62,000 crore and Tk 6,589 crore would respectively go towards paying interest on debt taken from domestic and external sources.
Officials said that the upcoming national budget themed as “Priority on lives and livelihoods, tomorrow’s Bangladesh,” would give priority to health, agriculture, food, disaster management, employment and social security.
It will also give a special focus on vaccination of the population for protection against Covid-19 infection.
Besides, aggregate revenue collection under the proposed budget (2021-2022) is likely to be targeted at Tk 3,92,490 crore. At this level, the target about revenue earnings will be Tk 14,490 crore higher than what was projected in the original budget for the outgoing fiscal.
Of the total projected revenue receipts, Tk 3,30,000 crore will be collected through the National Board of Revenue (NBR). Tax revenue from non-NBR sources has been estimated at Tk 16,000, while the non-tax is estimated to be Tk 43,000 crore in FY 2021-2022.
The budget deficit for FY 2021-2022 will be around Tk 2,11,191 crore, which is equivalent to 6.2 per cent of Gross Domestic Product (GDP), according to the budgetary framework.
The domestic borrowing to meet budget deficit is likely to be sized at Tk 1,13,453 crore and external borrowing at Tk 97,738 crore.
Out of domestic borrowing, Tk 76,452 crore will be sourced from the banking system, Tk 32,000 crore from sales of savings instruments and the remaining Tk 5,001 crore will be borrowed from other sources, a top finance ministry official said.
In the proposed budget, the government is likely to set a 7.2 per cent gross domestic product (GDP) growth target for fiscal year 2021-22. The revised budget of current fiscal year estimates 6.1 per cent GDP growth considering slowdown in economic activities.
The original budget of the outgoing fiscal (2020-21) has set the GDP growth target at 8.2 per cent.
Economists have, meanwhile, pointed to a number of emerging challenges in implementing the next budget. Such challenges include, among others, Covid-19 health crisis, revenue deficit, poor spending capacity of government agencies, slow progress in ongoing vaccination programme, job creation and bringing out the people from poverty.
“We are passing through a critical time amid the pandemic. Two crore people have become poor and employment of 2-3 crore people is at risk due to Covid-19 pandemic,” said Debapriya Bhattacharya, Distinguished Fellow of the Centre for Policy Dialogue (CPD).
He said the biggest challenge in the next budget would be sustaining jobs, creating more job opportunity and bringing the two crore people out of poverty. “The government will be able to serve the distress people if it spends budgetary funds ensuring efficiency and transparency,” he added.
“Implementation of the budget would be a key challenge for the government when a second wave of the Covid-19 pandemic has retuned with a greater vengeance,” Economist Dr Ahsan Mansur told The New Nation.
He said Covid-19 has jerked the country, shrunk the revenue collection and sent a severe shock to the national economy. In this situation, the government should take a proper strategy to tackle the pandemic. The economy can survive if the vaccination programme becomes successful.
Dr Mansur, Executive Director of Policy Research Institute (PRI), said, “Mobilizing the expected revenue and quality implementation of the ADP will be the other major challenges of the next budget.”
“Ensuring vaccination for majority people, rehabilitation of the victims of the pandemic by expanding social security programme and boosting rural economy will be key challenges of the next budget,” said Dr Zahid Hussain, former Lead Economist of the World Bank Dhaka office.
Besides, reopening of the educational institutions by vaccinating students and teachers is another challenge of the new budget, he said.
“There is no short-term impact of closure of educational institutions, but those fell under the poverty and dropped out, They will have long-term consequences. So, the government should have plans for reopening the institutions by providing protective measures to them,” he suggested.
The government should emphasize on capacity building of its agencies for proper implementation of development projects. It should also focus on providing easy-term loans to small entrepreneurs of the informal sector in order to sustain jobs, said Dr. Zahid.
