Education, Health and Human Resource Development
I propose to allocate a total of Tk. 24,040 crore for the primary education sector, which was Tk. 20,521 crore in the budget for current FY2018-19.
Health and Family Welfare
The government has been working with dedication and sincerity to develop a healthy and energetic population by ensuring quality health services, nutrition, affordable and quality family planning. Following the government interventions, the maternal mortality rate, infant mortality rate, child (under-5 years) mortality rate, malnutrition, stunting rate, low- weight rate, etc., are constantly reducing, and the average life expectancy rate is increasing. The Fourth Health, Population and Nutritional Sector Programme (4th HPNSP) is being implemented in the health service sector at an estimated cost of Tk. 1,15,486 crore over a period from January 2017 to June 2022. Nested on 29 operational plans, the programme is providing health and family planning services and improved medical education throughout the country. It is worth to note that 84 percent of the HPNSP programme is being financed by the government.
Increase in Foreign Remittance
To mitigate the burden of increased expenses in sending foreign remittances and to encourage bringing in foreign remittance through legal channels, an incentive at the rate of two (2) percent on money remitted by expatriate Bangladeshi will be provided from this financial year. For this purpose, I propose to allocate Tk. 3,060 crore in this year. This will significantly increase the remittance flow through legal channels and discourage the ‘hundi’ business.
Agriculture sector
Agricultural Development, Prosperous Country We will continue successful interventions, such as agricultural subsidies, other agricultural input incentives and support cards including those for fertilizers and seeds, support for agricultural rehabilitation, agriculture credit at easy terms, etc. For agricultural development, a 20 percent cash incentive for exports of agricultural products is being provided in addition to general investment made for agricultural development, and a 20 percent rebate on electricity bills is provided for the electricity use in irrigation pumps. The number of farmers holding agricultural support cards now is 2 crore 8 lakh 13 thousand 477. The present government has kept the sales price of fertilisers unchanged in the domestic market with a view to proteting farmers’ interests even though the import price of major chemical fertilisers increased at times, which has indirectly assisted in checking consumer price inflation. The sales price for chemical fertilisers will be kept unchanged in the next fiscal year irrespective of their imuport costs, and incentives for the agriculture sector will continue.
Fisheries and Livestock
The government has taken strong steps to ensure food security. Apart from introducing the Food Safety Act, 2013, we have formulated 6 sets of regulations and 2 sets of rules for implementation of the law. In addition, a new food and nutrition policy is being formulated.
Combating Climate Change and Protection of Environment
To ensure sustainable development through the protection of environment, containing pollution, protection of bio-diversity and tackling the adverse impact of climate, government has formulated the ‘National Environment Policy 2018’. It has allocated tasks among different ministries/divisions and departments to ensure their implementation. Steps have been taken to conduct research for projection of sea level rise in coastal areas of Bangladesh and its impact on agriculture, water resources and infrastructure. The government has enacted Brick Making and Kiln Establishment (Control) Act, 2019 to reduce air pollution. Steps will be taken in the coming days for the protection of Halda river including declaration of the river as an Ecologically Critical Area (ECA), and introduction of eco-tourism in various protected areas. The allocation for climate financing was 5.37 percent of the development budget in FY2014- 15, which has risen to 8.26 percent (0.75 percent of GDP) in FY2018-19.
Secured Position in World Trade
To encourage the export sector, all kinds of support will be provided and all obstacles will be removed so that the sector can remain competitive. All types of facilities will be provided for those products that have high export potential. Our ICT, leather, medicine, furniture, jewellery, especially jems and stone cutting, could be important sectors.
In FY2017-18, Bangladesh earned US$ 41 billion by exporting 744 products and services to 202 countries. Responding to the persuasive efforts from Bangladesh, the WTO extended the pharmaceutical patent waiver rights for LDCs upto 1 January 2033, which has opened up a new horizon for export of Bangladeshi pharmaceutical products. Under the WTO, the duration of waiver on Preferential Market Access given to developing countries for LDCs’ services has been extended to 2030. Services exports from Bangladesh has increased significantly in recent years, and it is expected that the benefits of LDC services waiver will lead to a further increase in our exports.
Leather and Footwear Industries
You know, we are now in the 8th position in the world in footwear exports. In future, more incentives will be provided by the government to facilitate further advancement of this potential sector. In the meantime, a Social and Environmental Compliance Handbook of Leather, Leathergoods and Footwear Industry has been formulated. Giving priority to the leather sector, the government will take all the steps that are necessary for the development of the sector. Exports of leather and leather products will be increased manifold, by ensuring environment-friendly waste treatment.
On the other hand, to ensure safety of citizens, all chemical warehouses are being transferred temporarily from the residential areas in the Dhaka city to Shampur and Keraniganj of Dhaka. In future, this temporary chemical village will be shifted permanently to Shirajdikhan in Munshiganj.
Golden Future of Golden Fibre
The Jute Act, 2017 and the National Jute Policy, 2018 have been formulated to resolve the problems that exist in the jute sector. With assistance from the government, scientists have cracked genome of jute, and invented golden bag as an alternative to polyethene bag. Steps have been taken to enhance the use of golden bags made of jute.
In FY2018-19, export incentives have been offered against 35 categories of products. Export incentives provided in FY2008-09 amounted to Tk. 1,500 crore, which stood at Tk. 4,481 crore in FY2017- 18, and these incentives have contributed to the efforts of enhancing export earnings.
Fast Growing Textile Industry
You know, we have acquired the 2nd position in the world in exporting of ready-made garments. In the current context of international trade, it is considered as a growing and promising sector. Keeping this in mind, our government has kept on providing all types of facilities to this sector including the existing incentives. Currently, four sectors of ready- made garments are receiving export incentives at 4 percent. I propose to provide an export incentive of 1 percent in the next fiscal year to the rest of the sectors of ready-made garments. An allocation of additional Tk. 2,825 crore will be made in the budget for FY2019-20 for this purpose.
Promising Eco-Tourism
Bangladesh has many tourist spots, including the world’s largest unbroken sandy sea beach at Cox’s Bazar, which are yet to be fully introduced to the world. Work on establishing an Exclusive Tourist Zone is underway at Sabrang, Cox’s Bazar, for foreign tourists. All the potential tourist spots in the country will be gradually made suitable for both local and foreign tourists.
Blue economy – the new horizon of opportunities
Through the conquest of the sea in the historic judgement by the International for the Law of the Sea (ITLOS), under the dynamic leadership of the Prime Minister, Bangladesh received exclusive rights to 1 lakh 18 thousand 813 sq. km of sea from neighboring Myanmar and India, which is almost equivalent to the size of Bangladesh. There are more than 13 heavy mineral resources in the coastal areas of the Bay of Bengal which are very valuable. In addition, there are 475 species of fish, and 36 species of prawn, and sea algae, etc. By utilizing these resources, it is possible to increase our GDP by two percent. The proposed strategies for proper utilization of this resources with immense potential are- quick completion of multi-dimensional survey of marine resources; increase of coastal ships and modernization of sea ports and their capacity enhancement; intensify fishing in both deep-sea and shallow coastal waters; introduction of sea eco-tourism and boat tourism in the private sector; and keeping sea coasts and sea ports pollution-free.
Research and Development
Scientific research and development (R&D) is one of the prerequisites for increasing productivity and maintaining long-term economic growth. Opportunities will be created to encourage research and development activities in the country. In the next FY2019-20, we are proposing to allocate an additional Tk 50 crore for the research and development sector.
Poverty Reduction and Social Safety Net Programmes
Bangladesh has made significant progress in poverty reduction through a coordinated approach efforts of various initiatives including the overall government development programmes, private investment, and social security programmes. The poverty rate was
40.0 percent in 2005, which has been brought down to 21.8 percent in 2018. The government has declared to reduce poverty to 12.30 percent and the extreme poverty rate to 4.50 percent by 2023-24.
Social Safety Net Programmes
The National Social Security Strategy Paper 2015 has been formulated for reducing poverty and discrimination. Action Plan 2016- 2011 for its implementation has been approved. We are increasing the allocation for the social safety net sector every year to ameliorate the condition of the poor. By now, nearly a quarter of the families in the country has been covered under the social safety net programmes. As per our Election Manifesto, 2018, budget allocation in this sector will be doubled in the next five years. The government has allocated Tk. 74,367 crore in the sector, which is 14.21 percent of total budget and 2.58 percent of GDP in FY2019-20. In the revised budget of FY2018-19, the allocation was Tk. 64,404 crore. We are also implementing various programmes for the marginal communities besides helping the people with disabilities.
Interest-free Microcredit for Poverty Reduction
136. In 1974, the Father of the Nation Bangabandhu Sheikh Mujibur Rahman for the first time started the rural social service programme for the purpose of reducing poverty of the disadvantaged and backward population in the rural areas. Through the Department of Social Services, families of the extreme poor people in villages have been receiving interest-free microcredit in the range of Tk. 5,000 to Tk. 30,000 under four microcredit programmes, namely- rural social services (RSS) activities, rural maternity center (RMC) activities, rehabilitation of the people affected by the burn injuries and disabled people and urban society development activities. About 50 percent of people involved in these activities are women. In the budget estimation for FY2019-2020, I propose to allocate Tk 64.5 crore for this purpose.
Sustainable Development Goals (SDGs)
You are aware, the Sustainable Development Goals (SDGs) were adopted in the historic UN Summit in 2015 to implement them over a period from 2015 to 2030, in continuation of Millennium Development Goals (MDGs). Bangladesh’s performance in achieving various goals and indicators of MDGs has been remarkable. We are fully committed to achieve similar success in implementing the SDGs. Meanwhile, 82 percent of SDGs has been incorporated in the 7th Five Year Plan, which is currently being implemented. SDGs Action Plans for ministries and divisions have been formulated under which various ministries and divisions are adopting projects/programmes. Regular monitoring of SDGs implementation is being conducted and the ‘Sustainable Development Goals: Bangladesh Progress Report 2018’ has been prepared covering all the goals and targets. For localization of SDGs, about 40 priority indicators have been approved for implementation at the district and upazila levels. In the priority list, targets, such as reducing the rate of poverty below 10 percent and extreme poverty below 3 percent by 2030 have been included.
We will need a huge amount of financial resources till 2030 to implement SDGs. The role of the private sector, in addition to the government, will be crucial to meet this resource gap. Besides, the government is also emphasizing implementation of PPP project as an alternative source of financing.
Public Private Partnership
As an alternative of public financing, we will encourage approval and implementation of projects under the Public Private Partnership initiative for infrastructure construction. Rules for Viability Gap for PPP Project, 2018 and Rules for PPP Technical Assistance Financing, 2018 have been issued for simplification of the government’s financial involvement process. A policy has been formulated for implementation of PPP projects under G2G agreement. Implementation of 3 PPP projects is underway at a cost of US$ 2.7 billion. At present, 61 projects have been selected for implementation under PPP model. A good number of projects are also in the pipeline.
Improvement of Ease of Doing Business Index
Rapid industrialization and employment generation will be possible, if we can reduce the cost of starting business. To attain this objective, reform activities have been strengthened to improve in the Ease of Doing Business Index of Bangladesh within two digits. Amendment of Companies Act, 1994 has been initiated for improvement of business environment. Various registration fees applicable for companies have already been significantly reduced. There will be no fee for companies having capital of less than Tk. 50,000.
One Stop Service (OSS) has been introduced so that investors can get different kinds of investment related services easily and quickly. Provision of investment related services as One Stop in 64 districts will be monitored, and investment related services will be gradually provided to all districts through One Stop Service.
Setting up financial institutions on strong base
The government has initiated and implemented various activities for the reform and development of banking, capital market, insurance and other financial sectors.
Good Governance in Capital Market
You know, a strong capital market is required for any strong economy. If an economy is strong, it means that its capital market is also strong. As we want a strong economy, we would like to see the existence of a strong, vibrant and well-functioning capital market. Capital market is the ideal platform to collect fund for long term industrial investment. However, there is a trend in Bangladesh to provide long term bank loans from short term deposits, which is not evident in other countries. It creates mismatch. The banks and loan recipients become the loser eventually. We will take effective measures to encourage investors to collect long term fund/finance from the capital market. Under the supervision of Bangladesh Bank, an amount of Tk. 856 crore has already been released under the incentive scheme, which shall be reused on a revolving basis for the protection of small investors’ interest. Training will be provided to potential investors for clear understanding on share market before their investment in the market. Vigilance has been strengthened to ensure compliance of the capital market. We shall offer numerous incentives for the capital market in coming years. Dividend income from the listed companies shall be tax-free upto Tk. 50,000. Double taxation on dividend from listed companies will also be removed. Special incentives will continue for encouraging investment in the capital market.
Insurance for encountering risk
Loss of crops due to natural calamities is quite frequent in our country. In order to save the farmers from the financial loss caused by this, a pilot project for ‘crop insurance’ will be introduced. In addition, insurance of properties generated from large projects will be covered by the local insurance companies. Measures will be taken to arrange group insurance with more than one company, if necessary. Insurance for ‘loss of profit’ will also be introduced. Accident insurance for factory workers will be implemented.
The government is planning to introduce livestock insurance, small insurance for poor women and health insurance for government employees and common people. Digitization of the insurance sector and its high rate of penetration have been planned. I believe, the use of life insurance is not prevalent in our country; popularization of life insurance may contribute to our economy to a great extent.
Revenue Collection Activities
Our goal is to increase revenue collection in line with GDP growth. We have taken many reform initiatives in the field of direct and indirect taxes with a view to increasing revenue collection. A large number of taxpayers will be brought under the tax net by conducting survey, bringing administrative reforms, making TIN compulsory for receiving different utility services, encouraging TIN holders to submit their tax returns. To ensure efficient and effective tax administration, NBR is in the process of automating and digitizing all operations of Income Tax, VAT and Customs departments. We are expecting the number of our income taxpayers will be more than one crore by the next few years. Income tax department has taken a number of initiatives to create a taxpayers’-friendly environment for building taxpayers trust in the revenue department.
The implementation of the Value Added Tax and Supplementary Duty Act, 2012, which was supposed to start in FY2017-2018, but was postponed for two years in response to the request from the business community. This act will be implemented in this year. The NBR has already reached a consensus informally with the business community. For smooth implementation of the new VAT Act, proposal is being placed in the Parliament for updating the Act by rearranging VAT rates. Our government is implementing VAT Online project with a view to making the VAT system completely automated. The NBR is working to set up Electronic Fiscal Device (EFD) in every business organization to make VAT collection more transparent. NBR is now in the process of procuring these EFD machines.
The existing Customs Act 2019 is in English. While contemporary issues of the Customs Department are updated every year through Finance Acts, it was felt that the Act should be in Bangla. Following the international best practices and the kind instruction of Hon’ble Prime Minister, the Customs Act, 2019 in Bangla has been prepared, and the process for placing it before Parliament is finalized. This law will replace the existing Customs Act, 1969. Meanwhile the process of formulating the new Income Tax Act following the international best practices has begun. I hope that this new law will be placed before the Parliament next year. Contd on page 14
