Kazi Zahidul Hasan :
Finance Minister AHM Mustafa Kamal on Thursday unveiled the budget for the fiscal year 2021-22 amid the coronavirus pandemic that has already ravaged the domestic economy and upended livelihood of millions of people and made unemployment soaring.
The minister presented the budget with an outlay of Tk 6,03,681 crore, the biggest in the country’s history, in a brief Parliament sitting, presided over by Speaker Shirin Sharmin Chaudhury.
In the budget for fiscal year 2021-22, the total allocation for operating expenditures has been set at Tk 3,78,357 crore, while the allocation for Annual Development Programme (ADP) is Tk 2,25,324 crore.
Health, agriculture and employment generation have been given priority by allocating resources for the ADP, which has already got cabinet’s approval.
Fiscal deficit
The overall budget deficit for FY 2021-22 will be Tk 2,14, 681 crore, which is 6.2 per cent of the GDP.
Out of the total deficit, Tk 1,01,228 crore will be financed from external sources, and Tk 1,13,453 crore from domestic sources.
Of the domestic financing, Tk 76,452 crore will come from the banking system and Tk 37,001 crore from savings certificates and other non-bank sources.
Prime Minister Sheikh Hasina was present at the budget session. A limited number of MPs attended the budget session wearing face masks and gloves and maintaining physical distancing norms.
President Abdul Hamid had earlier authenticated the budget bill after it was approved. He also witnessed the presentation of the national budget in the Parliament.
The proposed national budget for fiscal year (FY) 2021-22 is about 17.5 per cent of the GDP, 6.33 per cent above the original budget of the outgoing FY 2020-21.
The size of the original budget for the FY 2020-21 was Tk 5,68,000 crore, which was 17.9 per cent of the GDP. Later, it was revised to Tk 5,38,983 crore due to low revenue collection and sluggish project implementation by the government agencies during the ongoing Covid-19 pandemic. In his budget speech, themed, “Protecting Lives and Livelihoods,” the Finance Minister has admitted that Covid-19 pandemic
has hit the economy, putting the momentum of our economic growth, poverty reduction and other socio-economic development at risk.
The outbreak of novel coronavirus has given an unprecedented shock to the Bangladesh economy as did in most of the countries. Economic activity in the country slowed down due to lockdown imposed by the government to stop the spread of the coronavirus and its debilitating effects were observed in almost all sectors.
“The budget for FY 2021-22 has been prepared keeping consideration of the strategies taken to facilitate the recovery of various sectors of the Bangladesh from Covid-19 pandemic, especially to meet the challenges arising in the health sector and the issue of application of vaccine,” said Kamal while presenting the budget in the parliament”.
Setting out the spending plan for the year ahead, he said in the budget speech, “Allocation has been made in the proposed budget to meet the targets of each ministry and division to address adverse effect of the Covid-19 pandemic.”
He also proposed to allocate Tk 10,000 crore in the next fiscal year to meet the emergency requirement to respond to the pandemic.
GDP Growth
The GDP growth rate was estimated 8.2 per cent in the proposed budget for 2020-21. The GDP growth rate was revised 6.1 per cent for the current fiscal year due to continuation of economic slowdown amid surge in second wave of the pandemic.
However, the government has aimed at pulling out the economy from contraction and set a 7.2 per cent gross domestic product (GDP) growth target for fiscal year 2021-22.
The World Bank forecasts Bangladesh could achieve 3.6 percent growth this year, and if the pace of economic recovery is right, it could increase to 5.1 percent in the next fiscal year and 6.2 percent in the year after.
The International Monetary Fund has said Bangladesh’s growth could be five percent in the current fiscal year and it may increase to 7.5 percent next year.
Inflation
The CPI inflation for the FY 22 has been budgeted 5.3 per cent, down from the budgetary projection of 5.4 per cent in FY 21.
Total Revenue
The government set the target for revenue income in the fiscal year 2021-22 at Tk 3,89,000 crore which is 11.3 per cent of GDP. Out of this, Tk 3,30,000 will be collected through the NBR sources. Tax revenue from non-NBR sources has been estimated at Tk 16,000 crore, while the non-tax revenue is estimated to be Tk 43,000 crore.
