The draft of the national budget for fiscal year 2019-20 has been prepared, proposing reforms in some important areas like the banking and revenue sectors.
Finance Minister AHM Mustafa Kamal on Monday submitted the draft of the budget to Prime Minister Sheikh Hasina on Monday. Sources concerned said the budget will be finalised following guidelines and consent of the prime minister and the finance minister will place the proposed budget before the national parliament on June 13.
Sector insiders said this year the budget can be termed as reform-oriented, because there will be massive reform measures in the budget proposal for areas like value-added tax (VAT), capital market, bank, savings bond, social safety net programme and MPO-related issues etc. Primarily, the size of the estimated budget is Tk 5, 23,190 crore, 18.1 percent of the GDP, and it is observed that expenditure will increase in the upcoming budget by Tk 58,617 crore.
Regarding budgetary measures, AHM Mustafa Kamal has recently said he will prefer the sectors like education, health, infrastructure development and employment generation so that the process of comprehensive national and economic development can be upheld. "Allocation in these sectors will be more, so that the relevant projects may come to end quickly, reforms will be brought in banking, VAT, while the tax rate will not be extended, but there will be announcement for implementing VAT Act from 1st July this year," the minister said.
Before assuming power for a fresh term, the Awami League had put special focus in its election manifesto on turning villages into cities, and also on creating employment opportunity if possible, for one in each family. Accordingly, there be measures in the proposed budget to develop civic amenities in rural areas and decentralize the facilities of cities to the rural parts of the country.
Power, gas supply, internet facility, road connectivity and developing villages in a planned way will mainly be included in the programme. Besides, there will be a reflection on celebrating the birth centenary of the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman. Sources said, the target of revenue earning has been fixed at Tk 3, 77,810 crore in the coming budget to meet the large volume expenditures, equal to 13.1 percent of the GDP. The budget deficit may be Tk. 1, 25,293 crore.
Experts opine that if the VAT Act is implemented from 1st July, it will expedite the flow of revenue income in the next year. The new act will not suggest increase of VAT or Tax on any product, rather it may come down. The authority is very careful so that no one is harassed or faces hardships in the way of implementing this act.
"Although we are yet to be prepared fully to implement the new VAT Act, it will take long to ensure its full implementation, but it will be a continuous process, and a committee will be formed in this regard," the Finance Minister said. Since assuming the office of Finance Minister in the fresh term, AHM Mustafa Kamal has been vocal regarding the banking sector, NPL, interest rate etc., so it is expected that there will be some measures in this connection in the budget.
Talking to Bangladesh Post, the Managing Director and CEO of Rupali Bank Limited, Ataur Rahman Pradhan said, ‘ the Finance Minister has already announced that no more classification of loan will take place, and he has already given a guideline in this connection, that is already being practiced, and it is hoped that this will bring fresh dynamism.’
"As per the direction, the crises in the banking sector is being detected, an audit process has also been started, and I hope some positive changes will be experienced through all these moves," Pradhan added. He said, the ensuing budget will naturally have some reflection in this connection and it certainly will bring betterment for the banking sector.
This time also, the highest allocation will be made in the communication sector. Padma Bridge and rail link with Padma Bridge will be specially considered. Allocation of Tk 52,800 crore is being given under this head. 26.5 percent of the main ADP is allocated in this sector. Power sector is another preferable sector in this budget which is getting allocation of Tk 26, 017 crore 13 lakh. Health sector is to get 13,055 crore 47 lakh, and agriculture sector, Tk 7,615 crore 93 lakh.