Budget FY23: Investment target set at 31.63% of GDP

With a view to generating more employment by increasing investment, the government has set a target of 31.63 per cent investment of the GDP in the proposed budget of the FY2022-23. 

If the target is attained, the country will witness an investment of Tk 14,00,000 crore in the next fiscal year, of which Tk 11,09,820 crore will  come from the private sector and  Tk 2,97,702 from the public sector.

To meet the investment targets the Finance Minister AHM Mustafa Kamal has given a big concession to corporate houses.

He also mentioned the increase in the number of one-stop service, quick implementation of economic zones, social infrastructure projects under PPP, tax exemption for start-ups, more coverage of “My Village My Town” programme, support for the FBCCI Innovation Centre and many other initiatives.

In the proposed budget the total investment amount was set at TK 14, 07,522 crore, which was Tk 11, 20,793 for FY22, a 25.58 per cent increase.

Public investment amount was set Tk 2, 97,702 crore and private investment Tk 11, 09,820 crore for upcoming financial year, which are 13 per cent and 29.43 per cent increases respectively compared to the FY22.

The desired target for private investment to GDP ratio can be achieved by reducing corporate tax rate. “In order to accelerate employment generation, we have taken up very well thought-out sector-wise initiatives,” said Kamal in his budget speech.

In the budget finance minister proposed to reduce the tax rate for non-listed company from 30 per cent to 27.5 per cent and 20 per cent in place of existing 22.5 per cent for listed companies.

He also mentioned, “Our goal will be to build improved communications, necessary infrastructure and ensure power and energy security through increased public, private and foreign investment.”

To boost private investment the Finance Minister said with the aim of providing 150 investment-related services by 39 agencies through the One-Stop Service Portal, currently, as many as 58 services by 19 agencies are being provided.

The remaining services will be added to the portal soon. The implementation activities of Customs Bonded Automation are in progress and will be completed soon. In addition, steps will be taken to simplify the renewal process of Bond Licenses,” he said.

To increase investment the government has also taken initiatives for automation of land management and land registration process, initiatives to reduce land-related crimes, digitalisation of government services, reforms in financial sector and rationalisation of interest rates.

Kamal hoped that by the LDC graduation, foreign direct investment will get a boost enabling new developments. This will lead to massive development of infrastructure in the country, new job creation and overall better living standards for the people of Bangladesh.

Economic zones will boost domestic and private investment. The budget speech mentioned that establishment of 100 economic zones in the country is well in progress.

Allocation of land has been made to 196 entities in various public economic zones with a proposed investment of about $25 billion. Moreover, the investment in private economic zones is about $4 billion.

The legal and regulatory framework of the PPP authorities is being simplified to implement large social infrastructure projects under PPP in the future.

The finance minister proposed to exempt the start-up businesses from the bindings of all other types of reporting except submitting income tax return and allowing start-up companies to set off and carry forward losses over a period of nine years.

He also proposes to withdraw the restrictions on expenditure and fix rate of return over tax at 0.1 per cent in place of 0.6 per cent.

The government is implementing the project ‘My village My Town’ to develop vibrant rural economy. Large-scale investment projects will be undertaken as per the technical recommendations of the programme, said the finance minister in his proposed budget.

To increase investment and create new entrepreneurs the government is putting emphasise on innovation. It will provide encouragement and necessary assistance in setting up Innovation Centre proposed by the FBCCI, the new budget mentioned.

The government has taken various initiatives to ensure a safe environment in the industry sectors, Kamal said in his speech.