Finance Minister AHM Mustafa Kamal has defended his tweaks to the law and budget items to provide businessmen the highest number of benefits in the proposed national budget for the fiscal year 2021-22, under an objective that they would reinvest in business, which would ultimately create more jobs.
He made the remarks while addressing a virtual post-budget press conference on Friday against the background of the Tk. 6,03,681 crore (Tk 6.03 trillion) budget placed Thursday in parliament, equivalent to 17.5 percent of GDP, for which in turn he set a target to achieve 7.2 percent growth in the 2021-22 fiscal.
In the budget, the overall deficit was outlined at Tk 2,14,681 crore, which is 6.2 percent of GDP. Kamal's plan is to meet it by mobilizing Tk. 101,228 crore from external sources, and Tk 113,453 crore from domestic sources. Two-thirds of the domestic financing, Tk. 76,452 crore, Kamal expects from the banking system, and the rest (Tk 37,001 crore) from savings certificates and other non-bank sources.
The revenue income was estimated to be at Tk 389,000 crore, which is 11.3 percent of GDP.
The Finance Minister said he placed the budget to keep the country’s economy on the trajectory of development and growth offsetting the fallout of Covid-19 as in the past.
“This budget will create scopes for attracting new investment, generate new employment, protect the lives and livelihood of the marginalised people, and development. It is our firm belief,” he said.
He said more than 6.1 percent GDP growth is being attained in the outgoing fiscal year. "We’ll be able to attain 7.2 percent-plus GDP growth in the next fiscal year facing the corona situation,” he said.
Responding to a question as to what specific measures were taken to create employment since many people lost their jobs due to the pandemic, the Finance Minister said the top-most priority was given to the promotion of business in the national budget.
“The private sector has to be in the driving seat to generate employment. Government alone cannot create employment,” he said.
Agriculture Minister Abdur Razzak, Planning Minister Abdul Mannan, Bangladesh Bank Governor Fazle Kabir and Senior Secretary at Finance Division Abdur Rouf Talukder and National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem also spoke on the occasion.
Mustafa Kamal said many fiscal measures were taken in the budget to ease the business-related laws in order to promote business.
In many cases, taxes were lowered as the government’s main objective is not revenue collection, he said defending his position.
He said works are going to determine the effect on the poorer sections by the Covid-19. “We have not received the complete data on the issue. Bangladesh Institute of Development Studies (BIDS) and Bangladesh Bureau of Statistics (BBS) have separately been working on the issue.”
The government will take measures after receiving the findings of their studies, he said.
About a question on black money whitening, the Finance Minister said it is "not yet decided" whether the scope will continue or not. That’s why the issue did not come in the budget speech.
He admitted there is a strong argument that the provision goes against equitable justice, although many people are in favor of its continuation. “But things will be clear within a month.”
In some of his strongest comments, he grew adamant to make the point that black money and undeclared money are not the same, as the latter is created due to flaws in the country’s economic system.
Defending the target of achieving 7.2 percent GDP growth, he said the economy has been performing better with huge growth of 39.4 percent in remittances and 13.69 percent growth in export business.
“So, like previous years, it will not be impossible to achieve this target,” he said.
Responding to a question on the country’s military budget, Finance Minister said this is an important sector, but it was not mentioned separately in the budget due to time constraints.
Finance Secretary Abdur Rauf informed that the military budget received an 8 percent higher allocation than the current fiscal year.