Staff Reporter :
Finance Minister AHM Mustafa Kamal on Thursday afternoon proposed the national budget for 2020-21 fiscal year in the Parliament amid increasing coronavirus pressure on the economy.
He tabled the budget, the biggest in the country’s history, in a brief parliamentary session in presence of Prime Minister Sheikh Hasina and a limited number of lawmakers.
In the fiscal year 2020-21, the size of the total expenditure has been estimated at Tk 5,68,000 crore which is 17.9 per cent of the country’s gross domestic product (GDP). Out of this, Tk 3,62,855 crore has been allocated for operating and other expenditures while Tk 2,05,145 crore for the annual development programme (ADP), according to budget documents.
The expenditure plan is 13 per cent higher that the revised outlay for the outgoing fiscal year (2019-20) and is 8.56 per cent higher than the original budget.
The budget for the outgoing 2019-20 fiscal initially stood at Tk 523,000 crore but was later revised to Tk501,000 crore.
The national budget for the 2020-21 fiscal year, the second presented by the Awami League government in their third term, has given priority to health, agriculture, social safety net and job creation.
This budget comes at a challenging time for citizens and businesses faced with the significant financial hardships caused by Covid-19.
Delivering his budget speech themed, “Economic Transition and Pathway to Progress”, Kamal, said, “It has been forecasted that the world economy plunge into a great depression due to the outbreak of the novel coronavirus pandemic. The budget for 2020-21 fiscal year has been prepared bearing in mind the strategies required to be undertaken to meet the emergencies in the health sector of Bangladesh and recover from damages caused in various sectors of the economy. Sufficient allocation has been made in the proposed budget to satisfy the needs of all ministries and Divisions too address the impact of Covid-19 pandemic.”
The expansionary budget has set the revenue collection target at Tk 378,000 crore for the upcoming fiscal year, which begins on July 1. Out of this, Tk 330,000 crore will be collected through the National Board of Revenue (NBR).
Tax-revenue from non-NBR sources has been estimated at Tk 15,000 crore while the non-tax revenue is estimated to be Tk 33,000 crore, according to the budget documents.
In the new budget, finance minister proposed to loosen the country’s fiscal deficit goal for the first time in the country’s history widening it to 6 per cent of the GDP.
There was a decades long tradition to keep the budget deficit 5 per cent of GDP. The deficit also stood at 5 per cent in the last fiscal year (2019-20).
In the fiscal year 2020-21, the overall budget deficit will be Tk 190,000 crore and the major portion would be financed by record borrowing from banks.
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 be borrowed from banking system and Tk 25,000 from savings certificates.
The new budget projected 8.2 per cent GDP growth and 5.4 per cent inflation for the upcoming fiscal year.
While concluding his budget speech, the finance minister said, “At this criticial juncture in the wake of the outbreak of COVID-19 pandemic, our topmost priority is to save people from being infected by the virus. At the same time, it is incumbent on us to maintain the momentum of the economy to ensure the provision of food and clothing for the people.”
Kamal placed his second budget yesterday as the country’s 12th finance minister after he was entrusted with the portfolio in the third consecutive term of AL government.
Earlier on the day, the Cabinet at a special meeting approved the proposed budget for the upcoming financial year.
Prime Minister Sheikh Hasina presided over the meeting held at the cabinet room in the Parliament.
