Introduce Bond to arrange fund: GEF
Abu Sazzad: Riding on the ambitious target, the government yesterday declared the final budget for the current fiscal 2020-21 which is not enough to save people from COVID-19 pandemic as well as to revamp business and economic activities in the country, said experts.
The government may face several challenges to implement such ambitious budget because money collection will be one of the major difficulties in the upcoming days, they observed.
Global Economist Forum President (GEF) President Dr Enayet Karim said, if the government wants to implement such ambitious budget, the authorities’ concerned need to focus money collection matter as the NBR would face serious problem in the upcoming days to meet the revenue collection target. Besides, the higher borrowing from the banking sector may lead the sector into more vulnerability.
Talking on the crisis overcoming mechanism, the GEF President recommended the government for introducing government bond in the name of Bangladesh Bond or Corona Bond to collect money from alternative resource as well as to save people from COVID-19 outbreak.
“If the government introduces such bond, it would help implementing the ambitious budgetary targets. Besides, such initiative would strengthen the capital market. Considering this, the government need to introduce such bond to save people and economy from the ongoing disaster”, said Enayet Karim.
Dr Salehuddin Ahmed, former Governor of Bangladesh Bank claimed such unrealistic and traditional budget would not be able to save people and economy from the ongoing situation. He expected that the final budget will brought some major reforms in NBR and financial sector. “Absurd revenue collection and borrowing target is not enough to minimize economic recession as well as to save people from such a vulnerable situation”, he said.
However, the parliament yesterday passed national budget for the current fiscal year 2020-21 which will be effective from today (Wednesday).
Parliament on Tuesday passed the Tk 568,000 crore national budget for the fiscal year 2020-21, with the slogan ‘Economic Transition and Pathway to Progress’.
Finance Minister AHM Mustafa Kamal moved the Appropriations Bill, 2020 seeking a budgetary allocation of Tk 7,59,642.44 crore which was passed by voice vote.
Following the proposal mooted in the House by the Finance Ministry for the parliamentary approval of appropriation of fund 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 a total of only 421 cut-motions that stood in the name of opposition members on 59 demands for grants for different ministries.
A total of nine MPs from Jatiya Party and BNP submitted their cut-motions on the budget. They are KaziFiroze Rashid, MujibulHuq, Fakhrul Imam, PirFazlur Rahman, ShamimHaiderPatwari, Liaquat Hossain Khoka, Begum RawshanAraMannan, Harun Ur Rashid and RumeenFarhana.
They were, however, allowed to participate in the discussion on Law Ministry and Health Ministry.
Later, Speaker DrShirinSharminChaudhury 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 at the House when the Appropriation Bill was passed in Parliament and they did not raise any voice against passing of the bill.
Finance Minister AHM Mustafa Kamal on June 11 placed a Tk 568,000 crore to attain an ambitious 8.2 percent GDP, which has been revised to 5.2 percent in line with maintaining a 5.4 percent inflation for the next fiscal overcoming all the challenges and impacts of the COVID-19 global pandemic.
The total allocation for operating and other expenditures is estimated at Tk 3,62,855crore, while the allocation for the annual development programme (ADP) is Tk 2,05,145 crore.
The total budget size in the current fiscal year was earlier estimated at Tk 5,23,190 crore. In the revised budget, the expenditure was reduced by Tk. 21,613 crore, and thus revised at Tk 5,01,577crore.
Keeping in mind the realities and planned reforms in revenue management, the government set the target of total revenue income in the fiscal year 2020-21 at Tk. 3,78,000 crore.
Out of this, Tk 3,30,000 crore will be collected through the NBR. Tax revenue from non-NBR sources has been estimated at Tk. 15,000 crore, while the non-tax revenue at Tk. 33,000 crore, he continued.
The overall budget deficit has been estimated at Tk 190,000 crore, which is 6 percent of GDP, up from 5.0 percent in the last fiscal year. Out of the total deficit, Tk 80,017 crore will be financed from external sources, while Tk 1,09,983 crore from domestic sources of which Tk 84,983 crore will come from the banking system and Tk 25,000 crore from savings certificates and other non-bank sources.
For the social infrastructure sector in the proposed budget is Tk 1,55,536 crore, which is 27.38 percent of total allocation, in which allocation for human resource sector (education, health and other related sectors) will be Tk 1,40,222 crore.
Besides, the allocation proposed for the physical infrastructure sector will be Tk 1,67,011 crore or 29.40 percent, in which Tk 69,553 crore will go to overall agricultural and rural development, Tk 61,435 crore to overall communications, and Tk 26,758 crore to power and energy. A total of Tk 1,40,265 crore has been proposed for general services, which is 24.69 percent of the total allocation.
An amount of Tk 36,610 crore has been allotted for public-private partnership (PPP), financial assistance to different industries, subsidies and equity investments in nationalised corporations, banks, and financial institutions, which is 6.45 percent of the total allocation.
As per the ministry and division-wise allocation, the Local Government Division received a proposed budgetary allocation of Tk 36,103 crore, followed by Tk 22,883 crore to the Health Services Division alongside Tk 6,362 crore to the Ministry of Health and Family Welfare, Tk 29,442 crore to the Road Transport and Highways Division, Tk 24,853 crore to the Power Division, Tk 15,442 crore to the Ministry of Agriculture, Tk 33,118 crore to Secondary and Higher Education Division, Tk 24,937 crore to the Ministry of Primary and Mass Education, Tk 34,842 crore to the Ministry of Defense.
To fulfill emergency requirements, a,Tk 10,000 crore lump sum amount has been allotted to fight COVID-19.
The government has allocated Tk 95,574 crore for the social safety net programmes, which is 16.83 percent of the total budget and 3.01 percent of GDP in FY 2020-21. In last year’s revised budget, the allocation was Tk. 81,865 crore. Earlier on Monday, Parliament passed the Finance Bill 2020 with some changes.