Finance Minister AHM Mustafa Kamal on Thursday placed the proposed national budget for the 2023-24 fiscal in Parliament with a deficit of Tk 2,61,785 crore and a focus on making a Smart Bangladesh, with an annual growth target of 7.5 percent.
In his 252-page budget speech, presented through audio-visual medium, the finance minister hoped to bring down the inflation rate to around 6 percent from the existing 9 percent, a target economists described as ambitious.
Kamal, presenting his fifth budget in a row, proposed to spend Tk7,61,785 crore, while the total revenue has been estimated at Tk 5 lakh crore - of which 430,000 crore will come through National Board of Revenue and Tk 70,000 crore from other sources. The proposed size of the budget represents 15.2 percent of the GDP. He allocated Tk 4,36,247 crore to operating and other sectors, and Tk 2,63,000 crore to the Annual Development Programme (ADP).
The deficit in the proposed budget is estimated at 5.2 percent of GDP, down from 5.5 percent in the outgoing 2022-23 fiscal, the finance minister said. The deficit is proposed to be financed from domestic sources of Tk1,55,395 crore, while external sources will bring in Tk1,2490 crore.
The proposed budget is also the last budget of the current Awami League government before the next general election is held in December this year or in January next year. Keeping the election in mind the finance minister proposed to raise the tax-free individual income tax to Tk3.5 lakh besides withdrawing taxes on several commodities. He also highlighted the challenges that the government faces in the days ahead.
"Overall, our current challenge is to control inflation, improve the account balance situation and stabilise the foreign exchange rate," he said.
He also stressed the need for adopting the strategies to deal with "sustainable transition and post-transition realities from the LDCs. In particular tariff rationalisation, domestic resources mobilisation to meet fiscal deficit, withdrawal of subsidy or cash assistance or exploring alternatives should be considered now," he said.
The ruling Awami League hailed the proposed budget as "people friendly" and a document that will help the country come back from the crisis and global economic downturn. The main opposition BNP denounced it as a "smart budget to plunder the public money." Jatiya Party Chairman GM Quader termed the budget impractical and said that the government could use the public money to overcome election hurdles.
The per capita income will be at least $12,500 and less than three percent of people will be below the poverty line in a 'Smart Bangladesh'-targets to be achieved by 2041, said Finance Minister AHM Mustafa Kamal. He made the statement while delivering his budget speech.
"In our 'Smart Bangladesh', the per capita income will be at least $12,500; less than 3 percent of people will be below the poverty line and extreme poverty will be reduced to zero; inflation will be limited between 4-5 percent; budget deficit will remain below 5 percent of GDP; revenue-GDP ratio will be above 20 percent; and investment will be 40 percent of GDP," he said.
In the past decade and a half, under the strong leadership of Prime Minister Sheikh Hasina, Bangladesh has made unprecedented progress in all areas, including economic, social, political, cultural, scientific and infrastructure, and laid a sustainable foundation for a developed and prosperous 'Smart Bangladesh' by 2041.
"It is on this basis that by 2041, we will have 'Smart Bangladesh' as envisioned by the Honourable Prime Minister. The dreams of 'Smart Bangladesh' will be realised based on four main pillars --(1) Smart Citizen (2) Smart Government (3) Smart Society and (4) Smart Economy," he said.
In the smart Bangladesh, Bangladesh will achieve 100 percent digital economy, and science and technology-based literacy. "Healthcare will reach everyone's doorstep. All the services required by the citizens will be at their doorsteps, including automatic communication system and sustainable urbanisation. A paperless and cashless society will be created," he said.
Most importantly, a society based on justice and equality will be established in Smart Bangladesh, said the Finance Minister.
"One of the pledges of our election manifesto for the current term is to ensure sustainable and inclusive development. The Prime Minister has already set the target of building a developed and prosperous Bangladesh by 2041. Now she has laid bare a noble vision for establishing 'Smart Bangladesh', which will ensure maximum welfare of the people," he said.
'Forex reserves to improve soon'
Finance Minister AHM Mustafa Kamal said he is highly optimistic about improving the country's foreign exchange reserves in a short period of time.
"Hopefully, the reserve situation will improve in a short period of time," he said at Parliament while placing the proposed budget for FY2023-24, his fifth consecutive as the finance minister.
The minister said that the growth in imports that declined in recent times has started returning to normal.
"Concurrently, we are carrying out export promotional activities to augment our export income. Steps are being taken for disbursement of foreign loans in the pipeline," he said.
He mentioned that while achieving high growth is the goal of the government, it wants to lay greater emphasis on maintaining macroeconomic stability at the same time.
Already following the adoption of time-befitting strategy of the government, Kamal said, the instability in the balance of payment has lessened.
"We will remain cautious and adopt an accommodative policy in the coming financial year as well," he added.
He said that the gap between the existing multiple exchange rates is being brought to a minimum level with the aim of making the exchange rate gradually market-oriented.
To rebuild the foreign exchange reserves, the minister said that the current initiatives of verifying the accuracy of the price of imported items along with implementation, and monitoring of procedural requirements on LC opening, disposal and related issues shall continue in future.
"To encourage the use of formal channels in sending remittances, a 2.5 percent incentive is provided and remitter-friendly processes are being promoted including the mobile financial services," he said.
He also mentioned that all fees required for sending remittances through the Bangladeshi banks and exchange houses have been exempted.
"Thanks to these initiatives, our remittance income is on the increase."
Citizens give mixed reactions
The budget was proposed with the aim of maintaining ongoing development and achieving higher growth. As in previous years, Kamal suggested modifying the value-added tax (VAT) or charges on a number of goods and services.
This usually brings immediate effect on the cost of these goods and in most cases, the modification will take place on the day of budget announcement.
Providing instant reactions to UNB, people from different walks of life shared both positive and negative responses about the possible changes in the prices of everyday commodities and other services.
Products such as sanitary napkins, diapers, locally made electric bulbs, switches, meat and meat-related products, delivery charges of e-commerce, raw materials for cancer medicines and Malaria and TB medicines, to name a few, may come down in the proposed budget for the 2023-24 fiscal year.
"This is a very welcome step as the price of sanitary napkins should go down. Rural and urban women and young girls are the direct sufferers if the prices of pads increase; and baby diapers are also one of the most essential commodities for newborns, so this decision is certainly a positive one," said Sumaiya Mir, a mother who is currently pursuing her Master's at a city university.
Meanwhile, items including mobile phones, goggles and sunglasses, all kinds of tissue, mobile phone set, gas cylinders, cement, bricks, imported foods such as nuts (cashew, almonds etc), coffee, dates and a lot of necessary household items including refrigerator, oven and devices such as printers, scanner, router, earphones, pen drives would be pricier than before.
"Adding the extra amount of tax, VAT and import duties on several telecommunication devices directly contradicts the vision of the government and it will hamper digitalisation across the country if devices like mobile phones, routers get pricier than before," said Rafi Rahman, a banker.
Regarding the possible price hike of several kitchen electronic items , Nazma Akter, a garment worker residing in the city's Rayer Bazar area, told our sister newsagency UNB that this could put an extra burden on her to buy necessary electronic items such as a refrigerator for her house in this scorching summer.
Inflation target achievable?
The target of containing the rate of inflation at 6 percent in the upcoming fiscal year is being described as ambitious by some economists. The existing rate of inflation in the country has soared to over 9 percent.
Executive director of SANEM Selim Raihan said, "The government gave the promise to tackle inflation at 5.5 percent in the current fiscal year 2022-23. But we have not seen any such policies to be undertaken by the government to keep inflation in check at such a level."
"We have witnessed no significant initiatives from the government in terms of currency policy, duty tax policy, or market management policy, which could have contributed to controlling inflation," he said.Instead, the inflation rate has determinedly floated around 8-9 percent for an extended period. This prolonged high inflation has excessively burdened the underprivileged and needy segments of society, while the rich may have remained relatively unaffected, he said.
Senior research fellow of the Centre for Policy Dialogue Tawfiqul Islam also echoed the same opinion. He said inflation cannot be reduced while measures are not taken to bring down consumption and increase the policy rate. The initiative of withdrawing the interest cap and curbing the money flow is needed. But in the budget such policy remained absent, he said.
CPD in an instant reaction on Thursday termed the budget as ambitious and unrealistic. In the context of the ongoing crisis, the macroeconomic projections announced in the budget are illusionary and unattainable.
CPD Executive Director Dr Fahmida Khatun said, "It is impossible to curb inflation and bridle the price hike with the measures that have been announced in the budget."
But the imposition of the minimum charge of Tk 2,000 on individuals whose earnings fall below the taxable income to receive 38 services is unwise, Fahmida Khatun said.
"There was no adequate initiative in the budget to exempt duty from the daily essentials that we import," she added. However, the CPD praised the proposition of increasing the tax-free income limit to Tk 3.5 lakh from the existing Tk 3 lakh for individual taxpayers for the 2023-24 fiscal.
Education and health
The finance minister proposed an allocation of Tk 88,162 crore for the education sector in the national budget for the fiscal year 2023-2024, up from Tk 81, 449 in the current fiscal. It's an increase of 8.2% over the last budget.
In the proposed budget, Tk 34,722 crore was allocated against the Primary and Mass Education Ministry for 2023-24, which was Tk 31,761 crore in 2022-23, while Tk 42,838 crore against the Secondary and Higher education sector, which was Tk. 39,961 crore in 2022-23 and Tk 10,602 crore against the Technical and Madrasa Education Division, which was Tk. 9,727 crore in 2022-23.
While unveiling the national budget, the minister said "We are decentralising education planning and management and implementing a 'School Level Improvement Plan (SLIP)' to enhance efficiency in primary education management."
Under this plan, the delegation of financial power has been restructured at the field level. An integrated education Programme has been launched to ensure education in mainstream government primary schools for all children of the society including children with special needs.
Some 26,366 posts of teachers have been created in the pre-primary level of government primary school. Recruitment against a total of 32,577 posts including the newly created posts have been completed.
Apart from the recruitment of the required number of teachers, primary school teachers are being trained on 5 core and 3 non-core subjects to increase the quality of education, he said. Besides, greater importance is being given to technology-based education to equip students for building a 'Smart Bangladesh', said the minister.
A total of 59,000 laptops, multimedia projectors and sound systems have been provided along with internet connectivity to more than 50,000 government primary schools to set up multimedia classrooms. Some 800 officers have been trained on ICT and more than 1 lakh teachers have been imparted hands-on training to create digital content.
These teachers are creating digital content and teaching in the classrooms. As a result, classroom study is becoming interesting and the children are becoming more attentive in class, Kamal said.
Meanwhile, special allocation is being given to schools for continuing teaching activities in schools in emergencies. The ongoing school feeding programme for more than 29 lakh students of 15,470 government primary schools in 104 upazilas of 35 districts of the country through the project titled 'School Feeding in Poverty-stricken Areas' has been completed recently.
"We are continuing our efforts to transform educational institutions into modern and model institutions. A total of 351 secondary schools and 371 private colleges have been nationalised since 2009 to April 2023. As many as 315 private secondary schools located in upazila headquarters without government schools have been converted into model schools," he said.
The construction work of 180 buildings has been completed for the government post-graduate colleges located at the district headquarters. Out of the 1,610 colleges selected under the private colleges' development project, the construction of ICT-friendly buildings has been completed in 1,473 colleges.
Under SESDP (Secondary Education Sector Development Plan), 33 model madrasas have been set up along with 62 new schools in underprivileged areas. At present, 176 academic buildings are being constructed to expand science education along with 33 hostels under the Expansion of Science Education in Government Colleges Project.
A total of 33,285 multimedia classrooms and 11,307 computer labs have been set up in selected educational institutions since 2009 to enhance students' proficiency in information technology and to modernise teaching methods. In addition, 64,925 multimedia classrooms and 12,000 labs will be set up in future.
The digital content of 21 textbooks of primary level and the interactive digital text of 16 textbooks of class 6 have been completed and uploaded on the website. E-learning modules for 6 textbooks of class 7 and class 8 and e-learning material of 6 textbooks for class 9 and class 10 have been developed and uploaded. A total of 710 ICT learning centres have been set up in selected educational institutions.
Audio-visual training content has been developed for teachers on classroom activities of all subjects of class 6 and 7 and training has been imparted to all teachers through open reading.
The finance minister proposed to allocate Tk 38,052 crore for the health and family welfare sector for the 2023-24 fiscal. The allocation was Tk 36,863 crore in the last financial year. The increase is just 3.4 percent in a budget that expanded by almost 12.5 percent.
The minister said, "Ensuring quality and people-friendly healthcare is one of the election pledges of our government. We are working to implement this commitment."
He said in continuation of the success in achieving the Millennium Development Goals in the health sector, efforts are also being made to achieve the Sustainable Development Goals.
The main features of achieving sustainable development goals in the health sector are: expanding the prioritised healthcare services, engaging more people and reducing out-of-pocket expenditure, said Kamal.
"In brief, our foremost objective is to ensure quality healthcare for all citizens. Consistent with this objective, we are providing health care across the country through 31 operational plans under the Fourth Health, Population and Nutrition Sector Programme (HPNSP)."
Alongside short and medium-term strategies for macroeconomic stability, the government is thinking of lasting solutions for climate change issues to ensure sustainable development. These strategies are elaborated in Delta Plan and Mujib climate Prosperity Plan. Moreover, Bangladesh Bank is working on the impact of climate change on the financial sector, he said.
In order to strengthen green and climate resilient development in public investment management, the finance minister said new rules are being formulated and necessary amendments are being made to the existing rules.
He mentioned that the government has adopted the 'Sustainable Public Procurement (SPP)' policy to encourage environmentally and socially sustainable business and investment.
With a view to ensuring clean, efficient and climate resilient investment, he said, the government has reformed the process of environmental clearance by issuing the Environmental Conservation Rules, 2023 thereby ensuring environmental and social impact evaluation and reducing adverse impact of industrial units of projects.
Leave a Comment
Showcasing the brilliance of young European and Bangladeshi filmmakers ...
Uniting Turkish and Bangladeshi Artistic Visions, the Turkish Embassy ...