budget
Budget only to widen debt burden: BNP
BNP on Thursday described the proposed national budget for 2021-22 FY as anti-poor one and said people’s debt burden will get heavier if it is implemented.
The party also thinks the ruling party leaders and their relatives, not the marginalised poor people, will benefit from the new budget.
“In the 50 years of independence, Awami League government has given the country a budget with a deficit of more than one-third. To fill this gap, the government will take loans from domestic and foreign sources. This is how the government is imposing an additional burden of debt on people,” said BNP standing committee member Dr Abdul Moyeen Khan.
In an instant written reaction to the budget, he said the budget has been formulated with a 35.56 percent deficit which will be filled through taking loans from foreign or domestic sources.
Also read: New budget unveiled with focus on protecting lives and livelihoods
Dr Moyeen said their party tried in the past to take the country out of foreign-debt dependence. “On the other hand, the Awami League is repeatedly making the country's economy dependent on foreign loans due to their chaotic mega projects and mega corruption.”
He said every child in the country is getting into debt before birth due to formulation of such budgets repeatedly by the Awami League government.
“This year’s proposed budget has manifested that the government is imposing the burden of debt on the common people,” the BNP leader observed.
Another BNP standing committee member Amir Khosru Mahmud Chowdhury said the proposed budget is formulated without considering the interests and plights of marginal poor people in the country.
“The extreme poor, day-labourers and those who work in the informal sector, including rickshaw-pullers, those who push carts, those who sell food and beverage and tea sellers, have been badly affected by coronavirus. But there’s no incentive or cash transfer measures for them in the budget,” he said.
Also read: New budget: Tracking prices going up and down
Talking to reporters at his Banani residence, the BNP leader also said the budget has been formulated to appease the ruling party leaders and their relatives. “This budget will help make their bank balances bigger.”
He thinks the budgetary allocation for the health and education sectors are not enough at a time of a pandemic.
Khosru said it is now imperative to protect people’s lives and livelihoods instead of spending money on mega projects.
He said there should be an outline in the budget about how to protect the 5-6 crore people involved in the informal sector. “We must protect those who have lost jobs and are affected financially. Our party has earlier suggested allocating 7/8 percent of the GDP for giving them incentives. But we’ve seen that only 1/2 percent of GDP has been kept for them.”
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.
BUILD frets over budget deficit amid revenue collection struggles
The proposed budget deficit is above 6% of GDP amounting to Tk 2.11 trillion, which may reach to 8% as the revenue collection has been showing slow trend in pandemic period, according to BUILD, a business development platform, in its budget reaction.
The Business Initiative Leading Development (BUILD) thinks the deficit will mainly be filled taking loan from the banking sector and foreign loan.
Also read: New budget unveiled with focus on protecting lives and livelihoods
The dependence on foreign financing has been increased 162% than previous fiscal which is 'alarming', it said.
The social safety net will be expanded, higher than the current fiscal. Government has given enough emphasis on health safety issues, which need proper implementation.
Also read: New budget: Tracking prices going up and down
In terms of export diversification in Medical and Personal Protective Equipment(MPPE), extension of tax exemption benefits up to June 2022 may encourage export diversification in this sector, BUILD said.
On the other hand, it seems, sluggish investment will continue as COVID uncertainty remains, and private sector credit growth is still at a lower level(8.7%), according to BUILD.
ICAB president reacts to budget proposal
President of the Institute of Chartered Accountants Bangladesh Mahmudul Hasan Khusru circulated his reaction to the budget placed before parliament today for the next fiscal 2021-22.
He said his organization is looking forward to helping the government implement the budget, thanking the finance minister for acknowledging their role.
Also read: New budget unveiled with focus on protecting lives and livelihoods
"We believe that the joint initiative of NBR and ICAB in implementing Document Verification System (DVS) will facilitate to achieve the targeted revenue. We also believe that this initiative will bring about transparency and accountability in financial arena. We thank the Finance Minister to insert this significant issue in his budget speech," said Abu Nayem, a retired squadron leader in the army.
"We appreciate that the proposed budget has focused on employment generation through skill development, exemption in light engineering, exemption of agro-based industry and brining the new concept Made in Bangladesh," he added.
Also read: New budget: Tracking prices going up and down
At the same time, he said "more budgetary allocation" is expected in Education, Research and Development and Automation in tax administration. "Budget allocation for social safety net seems to be inadequate considering the substantial number of people falling below the poverty level due to ongoing COVID-19," said Mahmudul Hasan Khusru.
Budget imaginary, unrealistic: GM Quader
Jatiya Party Chairman on Thursday termed the proposed budget for 2021-22 FY imaginary and unrealistic, and said the government will not be able to implement it.
“We can assume that this fictitious and impractical budget can’t be implemented,” he told reporters after coming out of parliament’s budget session.
GM Quader, also the deputy opposition leader in parliament, said there is a huge deficit in the proposed budget and the system that has been mentioned to fill the deficit is not realistic. “This budget needs to be rearranged extensively.”
He thinks the allocation for the health sector has been increased slightly while that for the social safety net is much less in compression with the size of the total budget.
GM Quader also said the allocation for the disaster management sector is not satisfactory.
He said the finance minister has prepared the budget based on his perceptions without considering the reality. “This budget has to be changed rigorously to give it a real shape.”
The Jatiya Party chief said though the minister has proposed increasing the expenditure in the budget but he has failed to outline how the revenue will be collected.
“As per the target of last year's budget, even 60 percent of the revenue couldn’t be collected in 10 months. I don't know how much they’ll be able to collect in the next two months,” he said.
He said there is no clear guideline in the budget about creating jobs and providing financial assistance for those who have become unemployed and gone below the poverty line during the corona period.
GM Quader said common people had an expectation that a large allocation will be given for the health sector, but it did not happen with the routine increase amid the corona crisis.
New budget unveiled with focus on protecting lives and livelihoods
The government on Thursday unveiled a Tk 603,681 crore-national budget for 2021-22 fiscal to get the economy going 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 as Finance Minister AHM Mustafa Kamal presented the budget proposals in Parliament, with 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: New budget: Tracking prices going up and down
The size of the budget themed "Bangladesh towards a resilient future protecting lives and livelihoods' is 17.5 percent of the GDP.
He said that 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. “It is expected that 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.
“In the national budget, we usually formulate development plans in a coordinated manner by combining short, medium and long term action plans. However, due to the COVID-19 pandemic, we do not have all kinds of data in front of us for this year,” he said.
He also mentioned that Bangladesh, under the visionary leadership of Prime Minister Sheikh Hasina, is moving ahead on the path of faster economic transition than other nations by overcoming the initial impact of COVID-19.
“But already a second wave and even a third wave have begun around the world, the impact of which is quite pronounced everywhere,” he said.
New budget: Tracking prices going up and down
With the announcement of the proposed budget for the upcoming fiscal year (2021-22), a number of products are expected to see fluctuation in prices both upward and downward.
Prices down
The prices of products and services which may decline include microbuses, hybrid vehicles, LED bulb, stainless steel, poultry feed ingredients, materials used for manufacturing medical devices, ingredients used for producing medicine, autism services as well as locally-produced sanitary napkins, fresh fruits and puffed rice.
Also read: Budget deficit: Savings certificates, non-bank sources to be tapped for one-third of domestic financing
Locally-manufactured blender, juicer, mixer, grinder, rice cooker, multi cooker, pressure cooker, washing machine, microwave oven, and electric oven, as well as locally produced or assembled computer, laptop, notebook, notepad, tab, printer, scanner, keyboard, mouse, motherboard, power bank, router, network device, speaker, sound system, earphone, headphone, pen drive, CCTV, monitor, projector, USB cable, data cable, power reaper, power tiller, combined harvester and thresher machine.
Also read: It’s a very significant budget: BGMEA
Prices up
The prices of products and services which may go up include mushroom, imported meat, frozen meat of fowls, mineral water, mobile phone (cellular phone), iron bar and rods, denatured salt, sugar confectionary, vehicle safety glass, imported carrots, chewing gum, industrial salt and foreign soaps.
Finance Minister wants to spend big to deal with Covid
As Covid-19 has devastated normal life, Finance Minister AHM Mustafa Kamal proposed to allocate Tk 10,000 crore in the next fiscal year to meet the emergency requirements to respond to the pandemic.
While presenting it in Parliament on Thursday, the finance minister said the budget for FY2021-2022 has been prepared keeping in mind the strategies taken to facilitate the recovery in various sectors of Bangladesh from the shocks of the Covid-19 pandemic, especially to meet the challenges arising in the health sector and the vaccine application issue.
He said the global economy has been put at severe risk due to the prolonged effects of the pandemic and its second wave in different countries around the world.
Also read: Finance Minister writes a big cheque for health sector
Allocations have been made in the proposed budget to meet the targets of each ministry and divisions to address the adverse effect of the Covid-19 pandemic and vaccination strategy, management and steps.
The National Deployment and Vaccination Plan has been prepared under the Expanded Programme on Immunization (EPI) to protect the lives of people from the Covid-19.
The government procured 3 crore doses of Covishield vaccine of Oxford-AstraZeneca from the Serum Institute of India.
In addition, the minister said, 6.80 crore doses of coronavirus vaccine will be available from the Covax facility under the World Health Organization for 20 percent of Bangladesh population, that is for 3.40 crore people. Out of this, 1.06 lakh doses have already been received.
He said there are plans to buy vaccines from the governments of China and Russia, Pfizer Co. from the USA and Sanofi/GSK from France/Belgium.
Negotiations are at the final stage for procuring Sinopharm vaccine from China and Sputnik-V vaccine from Russia, and, if necessary, manufacturing the same in Bangladesh.
Meanwhile, 70 lakh doses of Oxford/AstraZeneca Covishield vaccine reached Bangladesh, and the governments of India and China gave 32 lakh doses and 5 lakh doses respectively of coronavirus vaccine as gifts.
The World Bank provided US$ 500 million for procuring Covid vaccines and US$ 14.87 million for logistic support.
Also read: Budget: Road to Graduation: Finance Minister shares opportunities, challenges
A loan agreement for US$ 940 million with the ADB to procure vaccines is at the final stage. Alongside, there is a good possibility to receive support for vaccine procurement from the European Investment Bank and AIIB.
Vaccination Plan
The finance minister said plans have been devised to vaccinate 80 percent of people in phases and in the first phase, people with risks will be vaccinated, and 25 lakh vaccines will be given each month.
He said the vaccination programme is being implemented at the field level through coordination between the EPI and the Communication Disease Control (CDC).
The first dose of vaccination in Bangladesh began on February 7 while that of the second dose began on 8 April.
Registration for vaccination and distribution of vaccine certificates and vaccine cards are being done digitally through the surokkha.gov.bd web portal using National ID cards.
Following the recommendations of the Scientific Advisory Group of Experts (SAGE) of the WHO and the National Immunisation Technical Advisory Group (NITAG) of Bangladesh and considering the reality of our country, people aged 40 or above are given priority in the Covid-19 vaccination programme, who constitute 20 percent of the total population.
The vaccination programme is conducted in 1,005 hospital-based vaccination centres across the country. Up to 31 May 2021, 58,22,157 people received vaccines, of which 36,10,635 are male and 22,11,522 are female.
Out of them, 41,73,930 have completed their second doses. The corona vaccine and logistic cold chain management are handled through the existing EPI in the country and the cold chain system of the Directorate General of Health Services.
To keep the regular vaccination programme uninterrupted, senior staff nurses, assistant community medical officers have been assigned as vaccinators.
Also read: Covid-19: Bangladesh logs 30 more deaths, 1,687 new infections
Prime Minister Sheikh Hasina has announced that the government will ensure free vaccination for all citizens of the country.
For this, the government will provide as much funds as is required to bear the expenses of procuring the required doses of vaccine, said the finance minister, adding, “We’ll make adequate allocations for this purpose in the budget.”
Budget Power and energy sector allocation to increase by Tk 726 crore
The allocation for the power and energy sector has been raised by Tk 726 crore in the budget for fiscal 2021-22.
The new amount is proposed at Tk 27,484 crore , up from Tk 26,758 crore in 2020-21.
Finance Minister AHM Mustafa Kamal proposed the allocation while unveiling the national budget in parliament on Thursday.
Also read: Finance Minister writes a big cheque for health sector
He mentioned that the country’s power generation capacity, including captive and renewable energy, has increased to 25,227MW as of May 2021.
He claimed that through integrated development of production, transmission and distribution system, 99 per cent of the total population of the country has been brought under the electricity coverage.
Mustafa Kamal pointed out that 38 power plants with a capacity of 14,115 MW are under construction, and contracts have been signed for the construction of another 20 power plants with a capacity of 2,961 MW to meet the growing demand for power in Bangladesh.
Besides, 6 power plants with a capacity of 650 MW are in the process of tender, and construction of 33 power plants with a capacity of 15,019 MW has been approved, he added.
“Due to the strict measures taken by the government, the system loss in electricity has reduced from 14.33 percent to 8.73 percent,” he said.
Also read: Bangladesh now “wonder of wonders”: Minister
The mega-projects in power generation include the Rampal 1,320 MW coal-based Maitri Super Thermal Power Plant project, Matarbari 1,200 MW Ultra-super Critical Power Plant project and Rooppur 2,400 MW nuclear power plant project. The 1,320 MW thermal power plant at Payra has started commercial production.
At present, 722 MW of electricity is being generated from renewable energy, he said adding that solar and wind power plants are being installed to generate 10 per cent of the total electricity demand from the renewable energy.
The finance minister said the government is working to lay all distribution lines and substations underground in the metropolitan area to modernise the power system.
There is a plan to increase the number of transmission lines to 28,000 km and the number of distribution lines to 6.60 lakh km by 2030.
“We expect that through the implementation of these projects, it will be possible to meet the growing demand for transmission and distribution of electricity throughout the country.
Also read: Finance Minister starts unveiling national budget
About the energy sector, the finance minister said that an average of 600 to 700 million cubic feet of natural gas is being added to the national grid daily by import of liquefied natural gas (LNG).
To re-gasify the imported LNG, two floating LNG terminals with a total capacity of 1,000 million cubic feet have been set up at Maheshkhali in Cox's Bazar district with a capacity of 500 million cubic feet each, he said.
In addition, to increase the supply of LNG, initiative was taken to set up a land-based LNG terminal with a capacity of 1,000 million cubic feet per day in the Matarbari area of Cox's Bazar district.
Finance Minister writes a big cheque for health sector
As the Coronavirus pandemic has taken its toll on human health, Finance Minister AHM Mustafa Kamal on Thursday proposed an allocation of Tk32,731 crore for health services and health education sector, up Tk 3,484 crore than last year’s allocation.
The minister came up with the proposal while unveiling the national budget for the 2021-22 fiscal year in Parliament.
With the new allocation, the health sector 5.42 percent of the total budget and 12 percent increase in absolute terms.
Though the government has given priority to the protection of lives and livelihoods, the total allocation is still nearly 1 percent of the GDP. But the World Health Organization recommends it should be at least 5 percent.
Health experts, however, said the proper implementation of the allocation is a big challenge for the health sector as the Health Ministry has long been manifesting poor performance in utilising the budgetary allocation.
They said the health ministry could not spend around Tk 9,000 crore of the development budgets of this sector in the outgoing fiscal year.
Also read: New budget unveiled with focus on protecting lives and livelihoods
The experts warned that without well-thought-out plans, alongside their proper implementation and effective management, the intended goals cannot be achieved through the allocation earmarked for the health sector.
They also said the Health Ministry should now first identify the areas of expenditure and the demands of the health sector based on priorities, for an upgrade to the country’s healthcare services.
In his budget speech, the minister said, “Giving an utmost priority to the programmes and steps taken by the government to address the Covid-19 pandemic, I propose to allocate Tk. 32,731 crore for the Health and Family Welfare sector in the next fiscal year, which was Tk. 29,245 crore in FY2020-2021.”
Like last year, he said, they have made a slight deviation from the traditional budget for the sake of effectively combatting the Covid-19 pandemic and resolutely overcoming its economic impact by giving priority to protection of lives and livelihoods.