The government is likely to allocate Tk 148 billion for new stimulus packages in 2021-22 fiscal to fend off the impact of coronavirus pandemic.
The size of the new stimulus package was proposed in the first meeting of the Budget Monitoring and Resources Committee held virtually with Finance Minister AHM Mustafa Kamal on Thursday.The package will be spent on subsidy in working capital interest and credit guarantee schemes to support economic recovery from the COVID-19 crisis.
The procurement of LNG import will also be included in the package, sources confirmed.
The meeting also proposed to allocate another Tk 435.25 billion for food and power subsidy, incentives on agricultural, jute sector and cash incentives on exports. Incentive on remittance transfers will also get an additional allocation in FY22.
The total subsidy and incentive have been proposed to be Tk 583.25 billion in the budget for the upcoming fiscal year, meeting sources said. An additional Tk 27.62 billion will be added to the package to support the fight against the coronavirus crisis.
The size of the next fiscal’s budget is likely to be Tk 5,925.65 billion or GDP’s 16.7 per cent to pump in enough funds in priority areas to support economic recovery from Covid-19 impacts.
With the increased expenditure plan, the government expects to achieve a 7.7 per cent GDP growth while keeping inflation rate at 5.3 per cent to revamp the economy dented by the unprecedented global virus pandemic.Alongside widening the social safety net, the government will also provide accommodation for homeless people in line with the government’s commitment in Mujib Borsho.
The revised budget outlay for the current 2020-21 fiscal year is going to be downsized by 5.28 per cent to Tk 5.3 trillion from Tk 5.68 trillion. The new budget will be 10.1 per cent larger than the revised budget.
Of the estimated budget of FY 22, the size of Annual Development Programme (ADP) will be 8 per cent higher at Tk 2,130 billion while operational expenditure will stand at Tk 3,795.65 billion, which will see an 11.3 per cent rise.
With the new budget, the government eyes to successfully implement its Covid-19 stimulus packages with increased allocation on the health sector and providing incentives and compensations.
Agricultural mechanization, rehabilitation, incentives on irrigation and seed and continuing subsidy on fertilizer; job creation and rural development will get priority in the upcoming budget.