Bangladesh targets higher growth through FY22 budget

The whole world economy is ruined by coronavirus. It also has an impact on the economy of Bangladesh. However, in the midst of all the fears and epidemics, Finance Minister AHM Mustafa Kamal is going to present the budget for the third time in a row for the third consecutive term of the government led by Prime Minister Sheikh Hasina. He will announce a budget of Tk 6 lakh 3 thousand 81 crore with priority to protect the livelihood of the people.

The Finance Minister will present the budget proposal for the fiscal year 2021-2022 in the budget session on Thursday (June 3) at 3 pm. After discussing the proposed budget, it will be passed on June 30.

It is learned that marginalized people of the country will get authority in the next budget. This year's budget titled 'Bangladesh on the path to a strong future with a focus on livelihood' has been prepared with a combination of the government's past achievements and the current situation.

The health sector has been given the most importance in this year's budget for a good reason. Besides, implementation of incentive packages announced by the Prime Minister, agriculture, food production and management are being given more importance in tackling COVID-19. Throughout the financial year, the government will have various food-friendly programs, the scope of social security programs will be increased.

In order to make the budget more participatory, any person or organization can read and download all the information and important documents of the budget on the website of the Department of Finance www.mof.gov.bd. Feedback forms and suggestions about the budget can be sent from home and abroad through the website. All opinions and recommendations received will be considered. It will be implemented during and after the approval of the budget by the National Assembly.

According to the Ministry of Finance, the original size of the budget for the current fiscal year 2020-21 is 5 lakh 8 thousand crore. Due to the epidemic in the revised budget it has been reduced to 5 lakh 36 thousand 963 crore. Against this huge amount of expenditure, the total income is estimated to be 3 lakh 69 thousand crore. The total income for the current financial year is 3 lakh 7 thousand crore. As a result, the income is increasing by 11 thousand crore rupees. Out of the total income, the income of the National Board of Revenue (NBR) is estimated to be 3 lakh 30 thousand crore. Besides, in the next budget, Tk 16,000 crore will come from non-NBR tax. And the tax-free receipts are estimated at Tk 43,000 crore.

The amount of foreign grants received in the next financial year is estimated at Tk 3,490 crore. In the budget of the next financial year, the GDP growth has been estimated at 7.2 percent. In the current budget, the growth rate has been fixed at 7.2 percent. Inflation is planned to be kept at 5.3 percent. The total GDP in the next financial year is estimated to be 34 lakh 72 thousand 500 crore. The total development expenditure in the budget is 2 lakh 36 thousand 7 crore. Of this, Tk 2,25,324 crore has been earmarked in the Annual Development Program (ADP), which has already been approved by the National Economic Council (NEC). In the current year's budget, the size of ADP has been fixed at Tk 2 lakh 5 thousand 145 crore.

Among the operating expenses in the budget, the most money will be spent in the next financial year to pay the interest on the loan. Of the Tk 6,589 crore allocated in this sector, Tk 62,000 crore will be spent on interest on domestic loans and Tk 8,569 crore will be spent on interest on foreign loans. As part of cost savings, the government will reduce investment in land acquisition, construction and construction work, shares and equity in the implementation of development projects in the next financial year as compared to the current financial year. In the name of capital expenditure, an allocation of Tk 32,060 crore has been made for these sectors in the next financial year. In the original budget of the current financial year, it was 36 thousand 490 crore. However, due to the Corona situation, the expenditure in these sectors was reduced to Rs 21,141 crore in the revised budget.

In the next financial year, a total of 2 lakh 36 thousand 7 crore taka will be spent in the development sector including the development activities of city corporations and autonomous organizations. In the main budget of the current financial year, the amount was 2 lakh 15 thousand 43 crore. As it could not be implemented due to mismanagement and lack of capacity, the allocation in the revised budget has been reduced to Tk 2 lakh 8 thousand 25 crore. Although the actual amount of implementation will be less than that.

Meanwhile, in the fiscal year 2021-22, there is an opportunity to whiten black money. There may be an opportunity to buy a flat or a building with black money with a certain amount of tax. In addition, the opportunity to launder cash or bank money with 10 percent tax may be continued.

Regarding the budget for the fiscal year 2021-22, Finance Minister AHM Mustafa Kamal said, "I am budgeting keeping in mind all sections of the society." It will be a budget to save people's lives. It is also a budget to protect people's livelihood. It will be the budget of everyone from marginalized people to businessmen-industrialists. I am preparing the budget for the fiscal year 2021-22 by adopting a strategy so that everyone has a partnership. Wait, see. With this budget, Bangladesh will have a strong future journey. '

10 thousand crore allocated to deal with corona

In the 2021-22 financial year, Tk 10,000 crore has been allocated for the purchase of vaccines from different countries. Besides, Tk 32,731 crore is being allocated in the health sector in the budget. This is 7.4 percent of the total budget. In the budget for the current fiscal year 2020-21, there is an allocation of Tk 29,247 crore in the health sector. New tax holidays are being provided in the next budget to increase investment in the health sector. If you invest in the construction of hospitals and clinics in the capital Dhaka, Chittagong, Gazipur and Narayanganj and outside the divisional cities, you can get 10 years tax leave. This opportunity will be available till June 30, 2031. Besides, all government hospitals will be modernized. Adequate equipment will be procured to deal with corona including ICU, ventilator. Besides, 2,000 new doctors, 6,000 nurses and 632 health workers will be recruited to deal with corona. 500 crore is being kept in the coming budget for them.

The monthly honorarium of the freedom fighters is 20 thousand taka

As per the promise of the Prime Minister, the monthly honorarium of the heroic freedom fighters is being increased to Tk 20,000. The freedom fighters will get this additional allowance from July 1. At present 1 lakh 91 thousand 532 ordinary freedom fighters are getting monthly honorarium. And 2 lakh 5 thousand 116 ordinary heroic freedom fighters get festival allowance, great victory day allowance and Bengali New Year allowance. Besides, 11,996 martyrs, war wounded and other heroic freedom fighters received honorarium. Among the monthly honorarium recipients are 57 freedom fighters.

In the budget of 2021-22 financial year, 5 thousand 705 crore 12 lakh taka has been allocated for this. In the financial year 2020-21, an allocation of Tk 3,656 crore was made for the heroic freedom fighters. In the financial year 2018-19, an allocation of Tk 3,305 crore was made for the honorary allowance of the heroic freedom fighters. In addition to honorarium allowances, several types of allowances and honorariums will be given to general, martyrs and war wounded and titled freedom fighters.

Corporate taxes are falling

As in the fiscal year 2020-21, corporate taxes are being reduced in the budget to encourage the private sector. This initiative has been taken to keep the traders affected due to corona alive. The corporate tax rate for a company not listed on the stock exchange could be raised to 30 percent, which is now 32 percent. And the tax rate of a single company may be increased to 25 percent. And the tax rate of listed companies may be reduced a bit.

According to the existing tax structure, there are eight levels of corporate tax. Companies listed on the capital market have to pay corporate tax at the rate of 25 per cent, unlisted companies at 32.5 per cent, individual companies at 32.5 per cent, new banks listed and approved in 2013 at 36.5 per cent, unlisted banks at 40 per cent and merchant banks at 36.50 per cent. Apart from this, companies in the ready-made garment sector have to pay corporate tax at the rate of 10 and 12 per cent and cooperatives at the rate of 15 per cent.

The importance of social security

The coverage of social security is increasing in the budget of 2021-22 fiscal year. In the new budget, for the first time, allowances will be given to all elderly people and widows in 150 upazilas of the country. Every widow and divorcee in these 150 upazilas is being brought under the allowance. The number of beneficiaries will increase to 24 lakh 75 thousand. In the next budget, there are 18 lakh indigent persons with disabilities, maternity beneficiaries for about 6 lakh poor mothers and the number of lactating beneficiaries is being increased. Besides, the number of beneficiaries will be increased to 95,000 in the budget to improve the quality of Hijras, Vedas and backward communities.

Reliance on foreign sources is increasing

The government, as always, is choosing foreign and domestic sources to finance the budget deficit. This time the dependence on internal sources is being reduced and the dependence on foreign sources is being increased. The target for borrowing from the domestic sector in the 2021-22 financial year is 1 lakh 13 thousand 453 crore. The government will borrow Tk 8,452 crore from the banking system in the domestic sector. And will borrow 32 thousand crore rupees from the National Savings Certificate. 5 thousand 1 crore will be taken from other sectors. The budget has set a target of borrowing from foreign sources at Tk 96,636 crore.

Concerned people say that in the next budget of the finance minister, special concessions will be announced in trade, investment and agriculture sectors. There will be a declaration of protection of domestic industry. The coverage of social security programs will increase to benefit the poor. As the income of the people and the government decreases due to the Corona epidemic, the budget will try to coordinate the means and the means. Corona In reality the budget session will be short. The finance minister does not want to impose new tax burden.

Former caretaker government adviser economist said. AB Mirza Azizul Islam told, "The biggest issue in the budget is timely implementation. Overall, the budget should focus on health, social security and agriculture. However, despite the outbreak of coronavirus in the current financial year, the Ministry of Health has not been able to spend a large portion of their allocated funds so far. We have to get out of this situation. On the one hand, there is a need to increase government spending, on the other hand, there is a need to increase revenue collection. What should be done in the case of revenue collection is to increase the tax coverage without increasing the tax rate. In particular, many are eligible to pay income tax, value added tax (VAT), but they are not subject to tax. They have to be brought under tax. The ADP will not be fully implemented unless institutional targets are met and officials are held accountable."