Tackling inflation, boosting investments, jobs to get more focus

Bangladesh – in the budget for FY23 – will prioritise tackling the inflation triggered by a global supply chain crisis, arising from the Covid-19 pandemic and Russia-Ukraine war, and work on strengthening investment, employment, agriculture and human resource development sectors.

Finance ministry sources made the disclosure to The Business Post, adding that the government is preparing the next budget also with a focus on boosting social security and food distribution programmes for the low income people.

According to insiders, the biggest challenge for Bangladesh in the next fiscal year is tackling inflation, so the matter is getting priority in the next budget. Local industries will get priority in the budget, and the agricultural sector will be mechanised.

The government is planning to boost job opportunities in the country by introducing special facilities to sectors that provide new or more employment. It plans to keep existing facilities to further increase investment in the country, and provide such facilities in some new sectors.

Sources say the upcoming budget will have a proposal putting special importance on implementing incentive packages, announced by Prime Minister Sheikh Hasina for tackling the impacts of Covid-19 pandemic.

The expansion of local industries will get priority in the budget for FY23.

Finance Minister AHM Mustafa Kamal is set to place the Tk 6,77,864 crore proposed budget for FY 2022-23 in Parliament on June 9. The figure is 15.4 per cent of Bangladesh’s GDP. Total revenue in the upcoming budget has been estimated at Tk 4,33,000 crore.

The budget for current FY is Tk 6,03,682 crore. So, the budget size for FY23 is going up by 12.29 per cent when compared year-on-year, and it will have a deficit of Tk 2,44,864 crore.

Finance Division sources say along with plans for boosting employment opportunities and investments, the government is also prioritising an increase in food production in the budget for FY23. Under the initiative, the government plans to modernise and mechanise the country’s agricultural sector, and focus on agro rehabilitation.

There will be a proposal for continued subsidy for fertilisers. Even if the fertiliser prices are not readjusted in the next budget, there will be an allocation of Tk 15,000 crore as agriculture incentive. Sources say the government is planning to generate a large number of jobs in accordance with its promises, ahead of the next election. Rural development will also get a focus in the upcoming budget.

A finance ministry official told The Business Post, “Just like the previous years, a proposal will be made seeking to increase the tax net, instead of hiking the tax burden on people. This will help boost investment and employment opportunities. “Most importantly, the budget will have greater incentive facilities for helping the expansion of local industries.”

The government – in the upcoming budget – has kept the allocations for subsidies, incentives and cash loans at 1.90 per cent of the GDP, which will be Tk 83,844 crore. Ministry sources further say the upcoming budget will focus on education and skill development for creating capable manpower. The allocation for social security will be increased from Tk 5,386 crore to Tk 1,13,000 crore.