The national budget for 2020-21 fiscal year, which is likely to be around Tk 565,000 crore, is going to give priority to reviving the economy with the rehabilitation of low-income people, the worst sufferers of COVID-19 havoc, according to official sources.
The new budget is also expected to take the challenge of mobilising revenue collection to give the stagnant economy a boost without imposing tax burden on the common people, the officials said.
If everything goes well, Finance Minister AHM Mustafa Kamal will place his budget proposal for the next fiscal year on June 11 in Parliament.
According to sources at the Finance Ministry and the National Board of Revenue (NBR), agriculture and health sectors are likely to get the highest priority in the upcoming budget.
In the grip of a shutdown, they said, the country is going through its most critical time as the coronavirus ripped through everything, bringing the national economy to a grinding halt.
The projected GDP growth is surely going to take a jolt as some international organisations apprehend that it would not be more than three percent while the government is saying it will be more or less six percent.
“The Finance Minister at a budget meeting with the Prime Minister on May 5 placed his draft budget proposal stating the growth for the next fiscal as 8.2 percent,” a senior official at the Finance Ministry said.
At the meeting, the Finance Minister projected that there would be a ray of hope for Bangladesh after the COVID-19 shock as the world might get a ‘new economic order’.
The next budget will, however, be Tk 64,000 crore higher than the outgoing fiscal’s budget.
“Early this year, the Finance Division decided to place a Tk 605,000 crore budget, but it reduced the size due to the COVID-19 onslaught,” the Finance Division official said.
Meanwhile, experts’ opinions and suggestions on the budget have been sought which have to be there by May 12 through online due to the ongoing general holidays. Once those opinions and suggestions are in hand, the proposed budget will be finalised and placed before the Prime Minister for approval.
According to NBR sources, the government is now under pressure due to the COVID-19 pandemic that will force the revenue collection to see a sharp slump because of economic stagnation since most mills and factories are closed. As a result, import-export activities are also seeing a negative impact.
The NBR officials said they are also worried about revenue collection during the next fiscal as they do not know when this COVID-19 curse will be over.
The revenue target for the NBR this fiscal was Tk 325,000 crore while the revenue collecting authority say they would be able to collect around Tk 270,000 core at the end of June. The revised target for this fiscal has been fixed at Tk 300,000 crore.
A senior NBR official said keeping this data in mind the target for the next fiscal would be Tk 330,000 crore. Of this amount, VAT will contribute Tk 128,000 crore, income tax Tk 105,000 crore while Tk 95,652 crore will come from customs duties.
Like previous years, the budget deficit has been fixed at five percent, till now, for the next fiscal. The size of the annual development programme (ADP) has been fixed at around Tk 210,000 crore giving priority to agriculture and health sectors.
But sources at the Planning Ministry said this year the ADP implementation would be around 65 percent due to the economic stagnation caused by the coronavirus fallout.
The ADP size in the current fiscal (2019-20) is Tk 523,190 crore while the government has revised the target and downsized it to Tk 503,190 crore.
The Planning Ministry was learned to have already informed other ministries to keep agriculture and health related programmes in their mind while formulating their next fiscal development programmes.
Finance Ministry officials, meanwhile, said there will be efforts to keep the inflation at five percent.
They said the government is thinking about borrowing more from the banking sector to fill the budget deficit. The projection to take loan from the banking sector was said to be Tk 72,000 crore, while the target for this fiscal was Tk 40,360 crore.unb