Tk9,500 crore has been earmarked for subsidizing the agriculture sector, say NBR and Finance Ministry sources
Government subsidies in the upcoming budget for 2021-22 fiscal year are likely to increase by Tk10,000 crore with the agricultural sector slated to get the highest allocation, official sources said on Saturday.
The agricultural sector gets the priority in line with the government’s policy to ensure food security during the ongoing Covid-19 pandemic, said the sources at the the Finance Ministry and the National Board of Revenue (NBR).
They hinted that the total subsidy amount for the next fiscal year may reach Tk49,000 crore, up from Tk38,600 crore in the current budget.
This amount is almost 8% of the proposed Tk602,880 crore budget, said the sources.
An amount of Tk9,500 crore has been earmarked for subsidising the agriculture sector, they said.
Finance Minister AHM Mustafa Kamal is set to place the budget on June 3 in the parliament. The theme of the document is “Priority on lives and livelihoods, tomorrow’s Bangladesh.”
According to the sources, the revenue target for the next fiscal has been set at Tk389,078 crore, where Tk330,078 crore will be contributed by the NBR.
Power sector is to get a subsidy of Tk9,000 crore, Liquified Natural Gas (LNG) Tk8,500 crore, and Tk7,300 crore for export support.
Tk4,000cr for expats
Expatriate workers would continue to get incentives as the budget may propose an amount of Tk4,000 crore in subsidy in this sector. This is up from Tk3,000 crore in the running fiscal.
The government is providing 2% incentives on their total amount of remitted money to encourage expatriate Bangladeshis to send money through legal channels.
During the pandemic the inflow of remittance increased surprisingly despite fear of a slowdown.
According to Bangladesh Bank data, Tk17,534 crore came in April, Tk16,205 crore in March, Tk15,100 crore in February and Tk16,637 crore in January.
Tk6,500cr food subsidy
The amount in food subsidy would be Tk6,500 crore.
The new budget will take note of the huge number of poor and low income people who have been seriously affected by the pandemic, the sources said.
The government is distributing food assistance through relief programs -- sale of rice at fair price -- that increases the amount of subsidy in the sector.
Meanwhile, from the very beginning of the Covid-19 pandemic the government had declared various types of stimulus packages for every sector to boost up the economic activities.
So far the government has announced 23 packages of Tk124,000 crore which is over 4% of the GDP.
The power sector subsidy is needed as the government buys at a higher rate from the private sector, selling at a lower price to the public users.
The same is the case for LNG as it is imported at a higher price.