A staggering Tk 6,036.81 billion (Tk 6.04 trillion) budget for the 2021-22 fiscal year will be unveiled today, focusing on saving lives and livelihoods of people from the ongoing corona pandemic while trying to reach long-term development goals with a sharp rebound in growth.
Finance Minister AHM Mustafa Kamal will place the country’s 50th budget and the Awami League government’s 13th consecutive budget at the Parliament this afternoon. It will be his third budget.Despite a slump in domestic resource mobilisation in the corona-hit 2020-21 fiscal, the new budget outlay will be GDP’s 17.47 per cent and Tk 356.81 billion higher than the outgoing fiscal’s Tk 5,680 billion original outlay.
The budget deficit may hit as high as Tk 2,146.81 billion or 6.2 per cent of GDP in FY22, Finance ministry officials hinted.
The estimated budget deficit crossed GDP’s 6 per cent threshold for the first time in FY21 even though it had remained within 5 per cent in the previous years.
Higher allocations will be made to predominantly meet corona emergencies and more focus will be put on health, food security and widening social security to safeguard vulnerable people as well as the economy.
Some Tk 100 billion is being kept as a special allocation for procuring Covid-19 vaccine in line with a government plan to inoculate 100 million people by FY22 to bring back normalcy in the economic activities.
Saving agriculture, CMSMEs and small businesses, protecting and creating jobs and stoking investment are among the priorities in FY 22.There will be mid and long-term plans in the budget to address economic and social risks posed by the pandemic.
Allocation on the social safety net may rise to Tk 1,250 billion to safeguard people who are already economically vulnerable or have been pushed back to the vulnerable segment by the pandemic.
The government is not compromising its long-term development vision while meeting the immediate needs of development expenditure as the size of the Annual Development Programme (ADP) is shooting up to Tk 2,253.24 billion next fiscal. It will be 9.84 per cent higher than the current fiscal’s original allocation of Tk 2,051.45 billion and 14 per cent higher than Tk 1,976.43 billion revised outlay.
The total revenue earning target, including grants, is being set at Tk 3,924.90 billion. Of which, total tax revenue will be Tk 3,460 billion where the contribution of NBR tax will remain unchanged at Tk 3,300 billion like that of the current fiscal year.
The budget deficit is being programmed to be met by mobilizing Tk 1,300 from domestic sources.
Of the domestic financing, the finance minister eyes to borrow Tk 930 billion from the banking system, Tk 320 billion from savings certificates and Tk 50 billion from other sources.
Kamal also hopes to collect Tk 204 billion budget support from the development partners apart from Tk 880.24 billion foreign loan and grants under ADP.
As farm output did not reach the expected level this year, Tk 170 billion is being allocated for the ministry of food, including Tk 3 billion special allocations for food import, keeping in mind that government might have to import food grain from abroad to keep food price stable.
The finance minister hopes for a rebound in GDP growth as the growth target is being set at 7.2 per cent for the next fiscal year even though provisional growth of FY21 dipped to 5.4 per cent against 8.2 per cent budgetary projection. The inflation target may be fixed at 5.3 per cent.
Industries, businesses might be offered some breathing space amid the pandemic with tax benefits alongside stimulus packages to help them recover from the corona losses. Besides, consumers may also see some tax benefits.