DHAKA, June 13, 2019 (BSS) – Finance Minister AHM Mustafa Kamal is set to unfold the proposed national budget of around Taka 5.23 lakh crore for FY20 today, aiming to bring a number of reform initiatives including new VAT law to rejuvenate the economy.
Kamal is scheduled to start unfolding the budget in parliament at 3:00 pm while this would be the country’s 48th national budget and 20th by the Awami League government in its five terms since the 1971 Independence.
The budget is presumed to propose a number of well-fare oriented initiatives and reforms in the banking sector, capital market, savings certificates and social safety net programmes and generate employments.
This would be the first budget to be delivered by Kamal while its size would be approximately Taka 58,000 crore more than that of the last fiscal presented by his predecessor Abul Maal Abdul Muhith.
Muhith last year presented a Taka 4,64,573 crore budget before he went on retirement by serving as the first finance minister to unfold the budget for the 10 times in a row since 2009.
Finance ministry officials told BSS the budget would propose developing a “Start up Fund” for the first time in the country for young entrepreneurs who could take soft-term loans to launch and run their ventures.
They said the new budget would pave the way for enlisting new educational institutions under the government’s Monthly Payment Order (MPO) system.
Kamal, they said, is set to propose a crop insurance scheme on pilot basis for several districts with a plan to expand it across the country in phases.
The budget would also unveil an insurance plan for stimulating expatriate Bangladeshi workers and minimizing their income related concerns.
The officials said the budget would propose a widened safety net coverage allocating Taka 5,321 crore to include afresh some 13 lakh beneficiaries and increasing their number to 89 lakh while current number of recipients is 76 lakh.
A finance division official familiar with the budget formation process said the new budget would eye for attaining a GDP growth rate of 8.20 percent in the coming fiscal.
He said the target was based on the provisional GDP growth rate estimation of 8.13 percent in the outgoing fiscal (FY19).
The new budget would target to contain the inflation rate at 5.5 percent assuming that the fuel and oil price in the global market would remain unchanged.
A National Board of Revenue (NBR) official, meanwhile, said the new VAT law which would come into effect from July 1 would to intensify the revenue mobilization campaign.
“The new budget will eye to create some 80 lakh new taxpayers in addition to the existing 20 lakhs in our efforts to raise the number of taxpayers to one crore,” he said.
The NBR official added that some 9 lakh capable businessmen would be identified across the country, especially in the rural and semi-urban markets.
He said the tax and VAT rates, however, would not be increased on any item, rather it would be reduced in some cases.
NBR, the official said, would appoint some 10,000 fresh university graduates on makeshift basis to identify the new taxpayers visiting their doorsteps.
The finance minister himself in a couple of occasions recently, however, assured that none would be harassed or burdened in imposing and realizing the taxes.
Under the expanded safety net coverage, the budget would propose inclusion of some 4 lakh fresh old age allowance recipients and expand the number of widow allowance recipients to some 3 lakh and insolvent differently able allowance recipients to 5.50 lakh.
The budget would make allocations as well for 70,000 maternity allowance recipients, 25,000 working lactating mother allowance recipients, 10,000 tea workers alongside 15,000 other allowance recipients.
Finance ministry officials said proposed budget would be 18.1 percent of expected GDP.
Of the total budget amount, Taka 2,02,721 crore is by now allocated against the Annual Development Programme (ADP) for the coming fiscal.
The overall revenue collection target in the budget would likely to be Taka 3,77,810 crore, including the grants, which is 13.1 percent of the GDP.
The budget is likely to entrust NBR with a task to realize Taka 3,25,600 crore as revenue while the non-NBR revenue collection target is likely to be Taka 14,500 crore.
The officials said the non-tax revenue collection target is likely to be set at Taka 37,710 crore while Taka 4,168 crore is likely to come as foreign grants.
The overall budget deficit is likely to stand at Taka 1,41,212 crore, an amount expected to be less than five percent of the GDP.
To meet this deficit, the government is likely to borrow Taka 63,848 crore from the foreign sources while the remaining Taka 77,363 crore from the local sources.
The new budget would focus on celebrating the birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman.