The government is likely to raise the subsidy allocations in the upcoming budget to help revive the economy from the impact of the coronavirus pandemic.
The volume of subsidy may stand at Tk 485 billion or 8.0 per cent total budget outlay for 2021-22 fiscal, sources at the finance ministry said.Due to domestic and global impact of the Covid-19 pandemic, the government had to introduce incentives in different formats including stimulus packages, refinance schemes and soft loan support for different sectors.
“So a rise in subsidy allocation is inevitable in next fiscal as well,” said the sources.
In FY 2020-21, the government kept Tk 30 billion for interest subsidy to the banks and financial institutions who are implementing the stimulus packages.
Nazma Mobarek, additional secretary of the finance ministry, said Tk 40 billion might be allocated in the upcoming budget for paying interest subsidy against the loans disbursed under different stimulus packages.
So far, 23 incentive packages involving Tk 1.24 trillion have been launched to help revive the country’s economy. The incentive packages are 4.44 per cent of GDP.
As the government is also focusing on boosting food production, the agriculture sector will get priority in receiving subsidies.The government has been providing food aid to the affected people through different relief programmes. Besides, food (rice) is being sold to poor people at lower prices. With a rising demand for food aids, Tk 65 billion may be allocated in the next budget for food subsidy.
According to the ministry sources, Tk 95 billion is likely to be allocated for subsidy in agriculture sector in addition to Tk 90 billion for power sector and Tk 85 billion for liquefied natural gas (LNG) sector.
The budgetary allocation for export subsidies may stand at Tk 73.5 billion while Tk 40 billion might be kept for incentive against remittance, sources said.
Besides, Tk 5 billion may allocate for the Jute sector and some other sectors will get Tk 16 billion as subsidy in the upcoming budget.