Finance Minister
No money from stimulus package enters stock market: Finance Minister
Finance Minister AHM Mustafa Kamal has said that remittances and undisclosed money have gone to the country’s stock market.
“But no money from government’s stimulus package went to the stock market”, he said while briefing reporters after the meeting of the Cabinet Committee on Public Purchase on Wednesday.
He made the remarks responding to a question regarding the media report that huge amount of money from stimulus package was diverted to the stock market by a section of business.
The government had provided financial support to different sectors under stimulus package to revive business from the shock of the Covid-19 effects.
Read: Finance Minister wonders why people moving to Europe risking lives
Kamal also defended the government’s position saying that remittance is absolutely owned by the senders.
“If any remittance earner or anybody after whitening the undisclosed money invests in the capital market, the government has nothing to do. This is their own choices where to invest their money in legal way”, he said.
He also said that the government has no plan to increase the current rate of incentives from 2 per cent on remittances.
He said declining trend of inward remittance in July will have no big impact on the economy.
Read: Corruption hurts me as it does others: Finance Minister
Replying to another question on the World Bank’s proposal on Rohingya rehabilitation the finance minister said he had no idea about the matter.
“If any suggestion comes from the World Bank with due merit to consider, concerned ministries would consider it. But if the suggestion does not carry any merit, they would not consider”, he said.
We have failed to sell the PPP idea properly, says Mustafa Kamal
Finance Minister AHM Mustafa Kamal has admitted that the idea of public private partnership (PPP) has failed to meet the expectation.
“Actually, we could not sell the PPP idea properly. But now work has started. We have to give the time... Still we’ve been facing that teething problems”, he told reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA) on Thursday.
The Cabinet committee in principle decided to drop a project “Construction of Laldia Bulk Terminal” from the government’s PPP list. Now, the Chattagram Port Authority (CPA) will implement the project by its own fund.
Also read: Finance Minister wonders why people moving to Europe risking lives
Earlier, there was decision to implement the project through PPP by the CPA on 59.87 acres of land at Laldia Char area on the right bank of the Karnaphuli River.
Kamal said the government believes it would overcome the problems facing with the PPP.
He said now the government has been implementing projects by its own fund as there is no shortage of money.
“We need foreign direct investment under PPP....the more FDI attraction means the more benefits”, he said.
Also read: Finance Minister dismisses the claim of 2.5 crore new poor
“But we could not attract DFI as we didn’t have adequate infrastructures”, he said adding, infrastructures mean physical and non-physical both.
The finance minister said the government believes that as the country is having infrastructures, there will be no problem in attracting FDI and PPP projects.
Responding to another question, he said that he would try to find out if money from the government’s stimulus package was diverted to the country’s stock market as reported by media.
“I would inform you after my own finding whether the allegation is true or not. But so far the fund from stimulus package is not supposed to go elsewhere is it was provided to eligible beneficiaries from specific targeted sectors.
Meanwhile, the CCEA approved a proposal of the Ministry of Liberation War to award the contract to an event management company through direct procurement method without tender process to arrange the concluding programmers of the golden jubilee of the independence celebration with due manner to showcase the country at home and abroad.
It also approved another proposal to purchase Oracle Cloud for the Bangladesh Data Centre Company Limited through direct procurement method.
Parliament passes new budget of ‘lives and livelihoods’
Parliament passed the Tk 603,681 crore national budget for the fiscal year 2021-22 on Wednesday, the last day of the outgoing fiscal year (2020-21).
Finance Minister AHM Mustafa Kamal moved the Appropriations Bill, 2021 seeking a budgetary allocation of Tk 792,912.95 crore which was passed by voice vote.
On Tuesday, Parliament passed the Finance Bill 2021 with some changes.
Following the proposal mooted in the House by the Finance Ministry for the parliamentary approval of appropriation of funds for meeting necessary development and non-development expenditures of the government, the ministers concerned placed justifications for the expenditures by their respective ministries through 59 demands for grant.
Earlier, Parliament rejected by voice vote 625 cut-motions that stood in the name of opposition members on 59 demands for grants for different ministries.
Twelve MPs from Jatiya Party and BNP submitted their cut-motions on the budget, themed as "Bangladesh towards a resilient future protecting lives and livelihoods'.
Also read: Parliament passes Finance Bill, allows whitening of undisclosed money
They are Kazi Firoze Rashid, Rustam Ali Farazi, Mujibul Huq, Fakhrul Imam, Pir Fazlur Rahman, Shamim Haider Patwari, Begum Rawshan Ara Mannan, Harun Ur Rashid, Mosharrof Hossain, Liaquat Hossain Khoka, Mokabbir Kan, and Rumeen Farhana.
They were, however, allowed to participate in the discussion on Law Ministry, Secondary and Higher Education Division and Health Services Division.
Later, Speaker Dr Shirin Sharmin Chaudhury applied guillotine to quicken the process of passing the demands for grants for different ministries without giving the lunch break.
Opposition and independent MPs were present in the House when the Appropriation Bill was passed in Parliament and they did not raise any voice against passing of the bill.
The finance minister on June 3 placed a Tk 603,681 crore-national budget for 2021-22 fiscal to get the economy moving in spite of the crippling Covid-19 pandemic with a strong focus on vaccinating the population and shoring up their jobs.
A bold target has been set to achieve 7.2 per cent of GDP growth with a deficit totalling Tk. 214,618 crore, which is 6.2 per cent of GDP.
To meet the deficit, Tk 101,228 crore will come from external sources, while Tk 113,453 crore from domestic sources of which Tk 76,452 crore will come from the banking system and Tk 37,001 crore from savings certificates and other non-bank sources.
Also read: Medical College (Governing Bodies) (Repeal), Bill 2021 placed in parliament
The growth rate for 2021-2022 has been fixed at 7.2 percent, remaining consistent with the government’s long-term plan and taking the post-Covid recovery situation into account while expecting the inflation rate will be 5.3 per cent during the period.
Total allocation for operating and other expenditures has been set at Tk 378,357 crore, while the allocation for the annual development program is Tk 225,324 crore.
The total revenue income in the fiscal year 2021-2022 has been fixed at Tk 389,000 crore, which is 11.3 percent of GDP. Out of this, Tk 330,000 crore 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.
The allocation for the social infrastructure sector in the next fiscal budget is Tk 170,510 crore, which is 28.25 percent of total allocation, in which allocation for human resources sector (education, health and other related sectors) will be Tk 155,847 crore.
The allocation proposed for the physical infrastructure sector will be Tk. 179,681 crore or 29.76 percent, in which Tk 74,102 crore will go to overall agriculture and rural development, Tk 69,474 crore to overall communications, and Tk 27,484 crore to power and energy.
A total of Tk 1,45,150 crore has been allocated for general services, which is 24.04 percent of the total allocation. Tk 34,648 crore is for public-private partnerships (PPP), financial assistance to different industries, subsidies, equity investments in state-owned, commercial and financial institutions, which is 5.74 percent of the total allocation.
Finance Minister wonders why people moving to Europe risking lives
Finance Minister AHM Mustafa Kamal has wondered why Bangladeshis are illegally moving to Europe risking their lives despite Bangladesh’s huge economic progress.
“I really don’t understand why people are moving to Europe risking their lives,” he said after a meeting of the Cabinet Committee on Public Purchase on Saturday.
The minister said this when reporters drew his attention to recent the rescue of 264 Bangladeshis from Tunisian coast of the Mediterranean.
Also read: Businessmen given highest benefits with objective to create jobs: Finance Minister
Tunisian authorities on June 24 rescued 267 migrants, most of them Bangladeshis, who tried to sail from neighbouring Libya to Italy across the Mediterranean, reports AFP quoting the International Organization for Migration.
Mustafa Kamal said people from other countries are also moving to Europe illegally, not only from Bangladesh. “This is a regular phenomenon.”
Also read: Finance Minister dismisses the claim of 2.5 crore new poor
Responding to another question, the finance minister said the government has not yet taken any decision on the demand of businesspeople to extend the repayment time of their loans which they placed against the backdrop of the new strict lockdown to check the spike in Covid-19 cases and casualties.
He noted that a high-level committee under Prime Minister Sheikh Hasina will take any decision on any special allocation for the poor people to save them from the economic fallouts of the new lockdown startling on Monday next.
Also read: Corruption hurts me as it does others: Finance Minister
Corruption hurts me as it does others: Finance Minister
Reiterating that about 15 new laws, including some amendments to the existing laws, will be passed in parliament in the next 6 months to prevent money laundering, Finance Minister AHM Mustafa Kamal on Wednesday said it causes him great pain when he sees corruption.
“You’ll see a substantial fall in corruption once those laws are passed by Parliament,” he said while briefing reporters about the decisions of the Cabinet Committee on Public Purchase on Wednesday.
The finance minister said he feels the same pain as other people do when it comes to money laundering.
READ: Finance Minister dismisses the claim of 2.5 crore new poor
Mustafa Kamal said efforts are going on to detect money launderers. “Those who were identified were either sentenced to jail or put on trial. Trials are on,” he said.
He said there are two reasons behind money laundering -- some people do it looking for a better place to invest and some others do it out of their greed.
“If we can create a better investment environment, then those people will invest here instead of investing abroad,” he said.
Speaking in Parliament on June 7, he said there was a time when sand used to be imported in the name of cement and one product used to be brought in the name of another product. “Now under-invoicing and over-invoicing are hardly done. But I don’t say such things have stopped completely. We hardly see these things in the newspaper,” he added.
Kamal said he knows how such irregularities are committed but does not know who are doing these. “Once such things had happened due to inefficient systems and ineffective management. These things will have to be stopped completely.”
READ: Zero tolerance for corruption in financial sector: Finance Minister
He said the government will frame new laws aiming to reform the systems in the financial sector. “We’ll enact new laws so that our banks and financial institutions can run their activities smoothly with responsibility. We’ll create the scope. I’m assuring you.”
Responding to a question, Mustafa Kamal today told journalists that Bangladesh will consider lending from its foreign exchange reserves to neighbouring countries if the returns in this regard are good.
Allocation in budget for agriculture 'enough' for Dr Razzaque
Agriculture Minister Dr Abdur Razzaque on Friday said enough allocation was given for the agriculture sector in the proposed national budget of 2021-22 fiscal year.
“I feel no deficit in the allocation to operate our activities. We’ve been given enough allocation,” he said at a virtual post-budget press conference.
Finance Minister AHM Mustafa Kamal also addressed the press conference arranged a day after he placed the proposed budget in Parliament.
The Agriculture Minister said though the allocation for agriculture declined in terms of percentage, it did fall in amount. The amount of agriculture loans was Tk 14,000 crore to Tk 15,000 crore in the past, which has increased at some Tk 22,000 crore in the upcoming fiscal year during the corona-period. And the interest rate of the loans was lowered, he said.
He said the government had given the highest priority to agriculture also during its first tenure after assuming power in 2009.
Also read: New budget unveiled with focus on protecting lives and livelihoods
Abdur Razzaque said the agriculture production has significantly increased. “So, now the goals of the government are to sustain productivity and to boost production further,” he said.
Since Bangladesh attained self-sufficiency in food, now another goal of the government is to expedite agricultural mechanisation and commercialization of agricultural products through promoting food-processing industry in the country, he said.
“The production in all the agricultural sub-sectors went up. Now we’ll go for processing the agricultural products in mills and factories and then supply to local market and export to international market. Such measures have been taken in this budget,” said the Minister.
He said the Agriculture Ministry started implementation of a Tk 3000-crore project for agricultural mechanisation to reduce the production cost amid the high wages of agricultural workers as the farmer don’t make profit in many cases now.
In this budget, Tk 680 crore has been allocated for the project implementation in the upcoming fiscal year, he said.
Also read: New budget: Tracking prices going up and down
“The budgetary allocation for agriculture is good enough. There will be no problem with (this allocation),” he said.
If needed, there is an instruction of the Prime Minister to allocate more funds to agriculture from any other sector except health, said the Agriculture Minister.
Planning Minister MA Mannan, PM’s Economic Affair Dr Mashiur Rahman, Bangladesh Bank Governor Fazle Kabir, Senior Secretary of Finance Division Abdur Rouf Talukder, National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem, among others, spoke at the conference.
Businessmen given highest benefits with objective to create jobs: Finance Minister
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.
Also read: New budget unveiled with focus on protecting lives and livelihoods
“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.
Also read: Allocation in budget for agriculture 'enough' for Dr Razzaque
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.
Dismissing all concerns, Razzaque takes mantle of speaking for health sector
Agriculture Minister Dr Abdur Razzaque on Friday said the health sector won’t face any fund crisis to tackling the Covid-19 situation.
“Fund will be given to the health sector whenever the money is required,” he said at a virtual post-budget press conference.
Finance Minister AHM Mustafa Kamal also addressed the press conference, arranged a day after he placed the proposed budget for 2021-22 fiscal in Parliament.
Dr Razzaque said the Finance Ministry also repeatedly assured that "money won’t be a problem," or "allocation won’t matter to face the corona."
He said the Prime Minister repeatedly advocated a balance between lives and livelihoods - the cardinal choice for policymakers in the pandemic era. Some on the left however, point to at least the possibility that this is a false dichotomy. Not Dr Razzaque though.
Also read: New budget unveiled with focus on protecting lives and livelihoods
"If the livelihood is not taken care of, many people will be severely affected or even die (without catching Covid)," he added.
The Agriculture Minister said the country’s economy is now vibrant and on a strong footing amid the growing reserves of foreign currency.
“The way the whole world is facing it (Covid-19), I think this government will also face it in that way. Money will not be a problem for it,” he said.
About the budgetary allocation for the health sector, Senior Secretary of Finance Division Abdur Rouf Talukder also said some Tk 14,200 crore has been kept in the proposed budget for procuring Covid vaccines during the upcoming fiscal year.
“We’ll provide the fund, if the health sector needs more money,” he said.
Also read: New budget: Tracking prices going up and down
The Finance Secretary said the budgetary allocation for the Health Services Division has increased by 13.2 percent for the upcoming fiscal year, compared to the outgoing fiscal year. But the overall budget size has risen by 6.3 percent. “So, the growth in the allocation for the health sector is more than double,” he said.
Replying to a question over the inability to spend more money on the health sector, Abdur Rouf said the government identified two problems – lack of capacity among the officials engaged in procurement, and mismatch between demand and supply during procurement.
He said the government will address the two problems in the upcoming fiscal year as it is going to take measures to provide training for the officials.
Planning Minister MA Mannan, PM’s Economic Affair Adviser Dr Mashiur Rahman, Bangladesh Bank Governor Fazle Kabir, and National Board of Revenue (NBR) Chairman Abu Hena Md Rahmatul Muneem, among others, spoke at the conference.
Budget: Govt allocates Tk 587 crore for cultural affairs, activists unhappy
Finance Minister AHM Mustafa Kamal proposed allocating Tk 587 crore for the cultural affairs ministry on Thursday, as part of his announcement of the fiscal 2021-22 budget.
The allocation is Tk 8 crore more than the elapsing budget for fiscal 2020-21.
The amount is 0.098 per cent of the proposed deficit national budget of Tk 6,03,681 crore.
Also read: New budget unveiled with focus on protecting lives and livelihoods
However, cultural activists expressed disappointment over the total allocation, saying that the amount needs to be at least 1 percent of the total budget.
"More than 500 theatre organizations under our Bangladesh Group Theatre Federation believe that more money should have been allocated to the Ministry of Cultural Affairs as we, the cultural activists, have constantly been fighting against all odds, upholding the spirit of our glorious Liberation War," Bangladesh Group Theatre Federation said in a press statement.
Also read: New budget: Tracking prices going up and down
"We urge the government not to push the nation backwards by demotivating the cultural sector with this allocation, rather it should increase the percentage of the total allocation in the proposed budget", they added.
Budget deficit: Savings certificates, non-bank sources to be tapped for one-third of domestic financing
A substantial portion of the proposed 6.2 percent of GDP budget deficit in the next fiscal will be met from the local sources, where a total of Tk 37,001crore will be taken out from the savings certificates and other non-bank sources.
Finance Minister AHM Mustafa Kamal placed this outline while unveiling the national budget in parliament on Thursday giving a total estimated expenditure of Tk. 6,03,681 crore, which is 17.5 percent of GDP.
Read: Govt aims to rein in budget deficit back within 5% from next fiscal
He said the overall budget deficit for FY2021-2022 will be Tk 2,14,681 crore, which is 6.2 percent of GDP, up slightly from the last budget's 6.1 percent.
“Out of the total deficit, Tk. 1,01,228crore will be financed from external sources, while Tk 1,13,453 crore from domestic sources of which Tk. 76,452 crore , or two-thirds will come from the banking system, and the remaining third, Tk 37,001crore, from savings certificates and other non-bank sources.
He mentioned that the government has set the target for total revenue income in the fiscal year 2021-2022 at Tk 3,89,000 crore, which is 11.3 percent of GDP.
Read: Overall budget deficit Tk. 190,000 crore in 2020-21
“Out of this, Tk 3,30,000crore will be collected through the NBR sources while revenue from non-NBR sources has been estimated at Tk 16,000 crore and the non-tax revenue is estimated to be Tk 43,000 crore”.