New national budget being presented Thursday

New national Budget

Dhaka - The national budget for 2021-22 _ the 50th in the Golden Jubilee of Bangladesh _ will be placed in the Parliament on Thursday, aiming to restore the momentum of the pandemic-hit economic growth.  

Finance Minister AHM Mustafa Kamal will deliver the budget speech for the third consecutive year at 3pm under the theme: ‘Priority on lives and livelihoods, tomorrow’s Bangladesh’. This is the 13th budget in a row for the Awami League government.

According to the sources in the Finance Ministry and the National Board of Revenue (NBR) the size of the budget would be Tk 603,681 crore. It is Tk 35,681 crore higher than the original budget size of the current fiscal year, which is Tk 5,68,000 crore.

It is 17.47% of the GDP and it is over 6 % in recent years.

The budget will give special priority to health, agriculture, social safety nets, employments, food and disaster management and food security apart from addressing the COVID-19 related issues.

The GDP size for the next fiscal has been set at Tk 34,73,911 crore.

In proposed budget the deficit will be Tk 213,802 crore and it will mainly be filled from the banking sector as there is sufficient liquidity.

Prime Minister Sheikh Hasina will chair a special Cabinet meeting at 12 noon Thursday at the Cabinet room of the parliament to approve the budget proposals.

The government is putting its focus on expanding the net to collect more revenue to tackle the big expenditures proposed in the budget. 

The total revenue collection has been fixed at Tk 392,490 crore, which is 11.35% of the GDP.

The National Board of Revenue (NBR) will collect  Tk 330,078 crore which is 9.5% of the GDP, Tk 16,000 crore will come from non-NBR sector while Tk 43,000 will come from non-tax pocket.

The target for foreign aid, grants and loans has been set at Tk 3490 crore.

The government plans to borrow some Tk 100,000 crore from there, while Tk 30,000 will come from savings certificates and rest of the money will come from foreign grants and loans.

GDP growth for the coming fiscal is estimated at 7.2% while the GDP for the running fiscal has been reduced to 6.1%.

In the budget proposal for 2020-21 fiscal the GDP was estimated at 8.2%, but due to the second wave of coronavirus and government imposed lockdown it has been reduced to 6.1%.

The inflation rate for the next fiscal would be the same as this year, 5.3% as the government is expecting a good production of food in the country like the previous year.

There will be Tk 10,000 crore special allocation for facing the impacts of COVID-19 in the budget.

The social safety net will be expanded with Tk 125,000 crore which is 30% higher than the current fiscal.

Meanwhile, the government has approved the Annual Development Programme (ADP) involving Tk 225,324 crore for 1,426 projects for the 2021-22 fiscal year with focus on transport and communications, power, housing, education and health sectors. Besides, Tk 11,469 crore also was allocated for autonomous entities.

Of the Tk 225,324 crore, an amount of Tk 137,300 crore will come from internal sources while Tk 88,224 crore from foreign sources.  Of the Tk 11,469 crore of the autonomous entities, the internal sources will provide Tk 6717 crore while the foreign portion will be Tk 4751crore.

Of the total budget, Tk 3,61,500 crore will be for operating or non-development expenditure while for capital expenditure Tk 32,660 crore has been allocated.

The maximum amount from the operating expenditure amounting to Tk 68,589 crore will be spent on loan interest payments – Tk 62,000 crore on internal loans and Tk 6,589 crore on external ones.

Some 5.25 lakh new widowed and abandoned women will come under the social safety net programme, the number of old age allowance recipients may increase by 8 lakh, while the number of beneficiaries from the Hijra, Bede and lagging behind communities would be raised by 9000.

Besides, the road transport workers and river transport workers would come under the social safety net programmes for the first time as they struck hard during the pandemic.

To face the impacts of COVID-19 pandemic, there will be Taka 10,000 crore special allocation in the budget.

The provision for legalising undisclosed income unquestioned in the next fiscal year’s budget would continue.

The budget might see 2.5 percentage points cut in corporate tax, a longstanding demand of the private sector.

At present, the corporate tax range from 25 per cent to 45 per cent. The one-person company law would be implemented from the next fiscal year, and the corporate tax for such companies would be fixed at 25 per cent.

The budget for fiscal 2021-22 might also see a tax holiday for 10 years for manufacturing import-substitute products like cars.

The tax holiday would be extended for another 10 years on some conditions.

The government might extend a tax holiday for 10 years for constructing hospitals outside Dhaka each with at least 250 beds.UNB