Budget FY 2021-22: Covid-19 vaccination to get priority

The upcoming national budget for fiscal 2021-22 will be a deft exercise on saving lives while creating more avenues for livelihoods to cope with the fallout caused by Covid-19 pandemic.

A mass vaccination for protection against Covid-19 infection will be major focus of the Tk 602,880 crore budget themed as "Priority on lives and livelihoods, tomorrow's Bangladesh."

Finance Minister AHM Mustafa Kamal will place the budget in the Parliament on June 3 under the shadow of the pandemic.

Bangladesh has been one of the first countries which began free Covid-19 vaccination in the first week of February this year.

Overcoming a disruption in the shipment of the Oxford-AstraZeneca jabs from India's Serum Institute, Prime Minister Sheikh Hasina's government has launched a drive to procure vaccines from alternative sources like China, Russia, the US and the UK.

The good news is China's Sinopharm vaccines are on the way, while Russia's Sputnik V jabs are also likely to reach Bangladesh soon.

Keeping the mass vaccination in mind, the revenue target for the next fiscal has been set Tk 389,078 crore, which is 11.02% of the GDP, according to the finance ministry and National Board of Revenue (NBR) sources.

Of the total amount, Tk 330,078 crore will be contributed by the NBR. The amount is 9.5% of the GDP.

In the proposed budget the deficit will be Tk 213,802 crore which will be 6.1% of the GDP. The deficit will mainly be filled from the banking sector as there is sufficient liquidity in the sector.

The government has targeted to borrow some Tk 100,000 crore from there while Tk 30,000 will come from savings certificates and rest of the money will come from foreign grants and loans.

The government is considering increasing interest rates of savings certificates to attract more investment.

The GDP size for the next fiscal has been set at Tk 34,73,911 crore.

GDP growth for the coming fiscal estimated at 7.2% while the GDP for the running fiscal has been reduced to 6.1%.

In the budget proposal for 2020-21 fiscal, GDP was estimated at 8.2%, but due to the second wave of coronavirus and government-imposed lockdown it has been reduced to 6.1%.

Finance ministry sources said that economic recovery was not fully done due to coronavirus, especially the second wave.

They said that trade and business, tourism sector, transportation and restaurant business are the worst affected.

"As a result, GDP growth will not be at desirable level," a senior official in the finance ministry said.

Inflation rate for the next fiscal would be the same as this year, 5.3%, as the government is expecting a good production of food in the country like the previous year.

Sources said that the possibility of increasing fuel oil price is thin due to the second wave of coronavirus across the globe and the domestic market will get the benefits of this lower fuel price.

Priority will be given to health, agriculture, food, disaster management and employment in the coming budget to offset the impact of coronavirus in the quickest possible time.

There will be Tk 10,000 crore special allocation for facing the impacts of Covid-19 in the budget.

The social safety net will be expanded with Tk 125,000 crore which is 30% higher than the current fiscal.

Meanwhile, the government has approved the Annual Development Programme (ADP) involving Tk 225,324 crore for 1,426 projects for the 2021-22 fiscal year with focus on transport and communications, power, housing, education and health sectors. Besides, Tk 11,469 crore was allocated for autonomous entities.

Of the Tk 225,324 crore, Tk 137,300 crore will come from internal sources while Tk 88,224 crore from foreign sources.  Of the Tk 11,469 crore of the autonomous entities, the internal sources will provide Tk 6,717 crore while the foreign part will be Tk 4,751crore.