The proposed budget for FY2021-22 is business-friendly as it aims to increase production and create employment opportunities, Finance Minister AHM Mustafa Kamal said on Friday.
“This year’s budget is a business-friendly budget. Businesses will get various opportunities from this budget, and they will increase the production. If production is increased then it will also increase employment, as production is impossible without manpower,” the minister said in the virtual post-budget press briefing.
In response to a question about not having the opportunity for black money, the finance minister said he had never talked about black money.
“The precaution we put in our budget is undisclosed income. There is a big difference between black money and undisclosed income. Black money is created through corruption, and undisclosed money is created because of our system,” said AHM Mustafa Kamal.
He also said that the budget has proposed to reduce the tax rate, and the collection of revenue will increase if it can be implemented.
“Our intention is to make the revenue law easier. We believe that if we can simplify the law and involve the taxpayers in this work, revenue generation will increase significantly,” he added.
“Many countries of the world have tried to increase revenue generation. Even the United States once had a 75% tax rate, though this is no longer the case,” the minister also said.
Responding to a question from reporters about the record deficit, Planning Minister MA Mannan said deficit budgets are not new in the world.
“We are a developing nation, and the budget of such a nation will always be a deficit. We are in a world of conjecture. There will be no benefit in arguing about it,” he said.
Agriculture Minister Abdur Razzaq said agriculture is a sector of the country that has high potential, and Bangladesh is now producing goods rather than importing.
“We are going to export our agro products after meeting the domestic demand. For this, the government gives opportunities to the exporter and imposes a tariff on importers,” said Abdur Razzaq.
He also said that there has been a revolution in the poultry and dairy sector thanks to new technology, development of breeds, and knowledge.
“In this case, [the government] wants to increase production by providing more opportunities to the entrepreneurs, which will increase production, decrease imports and create employment,” he added.
However, the allocation for health is not consistent with any of the expectations or needs during a pandemic, experts said.
Abdur Rauf Talukder, senior secretary of the finance department, said the allocation for the health sector had increased by 13% from last year.
“There is no problem with the allocation for vaccination as there are enough funds and, if necessary, it can be taken from other sectors,” he added.
He also said initiatives to bring transparency in the purchasing of equipment for the health sector will be taken.
The finance minister presented the proposed budget, titled “Protecting lives and livelihoods for the fiscal year 2021-22,” in parliament on Thursday.
The size of the budget has been proposed at Tk603,681 crore. The 50th budget is set to be the biggest deficit budget in the history of the country.
The deficit in the budget stands at 211,191 crore, including grants, which is 6.1% of the GDP. Excluding grants, the deficit stands at Tk214,681 crore.
Regarding filling the deficit, the finance minister said Tk113,453 crore in loans would be taken from the domestic sector and Tk98,738 crore would be taken from the foreign sector.
Among domestic sectors, the target for loans from the banking the sector is Tk76,452 crore, Tk32,000 crore from savings certificates, and Tk5,001 crore from other sectors.
The proposed national budget for 2021-22 fiscal year presented on Thursday lacks both mid- and long-term plans for the economy to recover from the onslaught caused by Covid-19, the Centre for Policy and Dialogue (CPD) has said.
In a post-budget discussion with media held in Dhaka on Friday, experts from the independent think tank said although the budget seemed adequate in theory, it was not sufficient.
At the discussion, CPD’s Executive Director Dr Fahmida Khatun said: “The budget document refers to the management of the Covid situation throughout which was not the case during the first Covid budget [FY21]. However, it does offer much in terms of concrete measures and innovative policies to combat Covid induced challenges.”
In the budget speech it is mentioned that health, agriculture, and employment generation have been given priority while allocating resources for Annual Development Program (ADP). However, actual allocation does not reflect this as these promises have not been supported by adequate resources, she added.
Citing the budget projection, she pointed out that it does not seem to recognize the implementation challenges and hence does not spell out ways to overcome those challenges.
“It does not spell out what concrete reforms would be undertaken to improve the economy,” Dr Fahmida elaborated.
Given the magnitude of negative impact on various sectors due to Covid-19, CPD had emphasized on the need for medium term strategy for economic recovery. The budget for FY22 has no indication on this.
CPD comprehends that, this puts under risk the fulfillment of the promise made in the 50th budget to move towards a resilient future by giving priority to lives and livelihoods.