Muhith unveils national budget for FY '11 today
Thursday, 10 June 2010
FE Report
Finance Minister AMA Muhith presents the national budget for 2011 fiscal at the Jatiya Sangsad (parliament) today (Thursday), facing the challenge of turning around a slowing economy while fostering investments in infrastructure, energy and power.
The finance minister needs to take right steps to help reverse stagnant public and private investments, which are required to put the growth momentum back on track.
Economic growth has dropped to 5.5 per cent-lowest in seven years-and economists and experts say the country must alter years of "lower-than-desired" spending on infrastructure to become a middle-income nation in a decade.
Sustaining revenue collection growth, financing big budget, fending off inflationary pressure and improving the implementation capacity of development projects are other challenges the economic planner faces.
The budget, the second for the alliance government led by Awami League, is expected to focus on human resources development, rural development, job creation, and widening the social safety net.
"Reviving growth is a major challenge the budget must wrestle with," said Dr. Zahid Hossain, a senior economist at the World Bank.
Dr. Zahid, who spoke in his personal capacity, said economic growth declined by one-sixth in the last four years and growing energy and power shortages caused that decline.
In the upcoming budget, the energy and power sector will get bigger allocations in view of the severe crisis in electricity generation worsened by the shortage of fuel supply.
But the problem remains: the amount of subsidy for purchasing high-cost power from rental plants and subsidised agri-inputs could balloon, putting additional fiscal burden on the government.
Bangladesh Nationalist Party (BNP)--the main opposition-will attend this year's budget session, although it was not present on the day when the 2009-10 budget was placed before Parliament.
Mr. Muhith has already hinted that the size of this fiscal year's budget would be between Tk.1.30 trillion and Tk.1.32 trillion, an 18 per cent rise from the last budget.
The overall budget deficit should not go beyond 5.0 per cent-a target Bangladesh has maintained over the years.
Centre for Policy Dialogue (CPD), a think tank, has advised the government to loosen its public purse in an attempt to reverse the years of stagnation in investment that is pivoting around 24 per cent since 2004.
"The government should scale up public expenditure to help steer forward the wheel of development," said Dr. Mustafizur Rahman, executive director at CPD.
He said the good implementation rate of the outgoing annual development plan means that the government agencies have the capacity to spend higher allocation.
The ECNEC, the highest policy making body, okayed a Tk.385 billion annual development programme (ADP) for the next financial year, which saw an 18 per cent rise from the outgoing fiscal.
In the outgoing fiscal, the government unveiled a Tk 25 billion PPP (public-private partnership) budget to catalyse private investment in the infrastructure sector, but it failed to spend from the window.
To keep that in view, the finance minister may announce a fresh one with a smaller allocation of Tk 30 billion for the infrastructure investment.
In a shift to the traditional budget speech, the finance minister will make a power-point presentation in Parliament highlighting the details of major budgetary measures.
This will be the 39th national budget of the country and the 11th of the Awami League government.
The finance minister will also present the annual financial statement, supplementary budget, combined demand for grants, consolidated fund receipt and the Bangladesh Economic Review.
All the documents will be available on the web sites including www.mof.gov.bd, www.bangladesh.gov.bd, www.nbr-bd-org, www.plancomm.gov.bd, www.imed.gov.bd, www.bdpressinform.org and www.pmo.gov.bd
Top government officials, politicians, economists, senior journalists, business leaders and members of the diplomatic corps and international agencies are expected to attend the budget session.
Finance Minister AMA Muhith presents the national budget for 2011 fiscal at the Jatiya Sangsad (parliament) today (Thursday), facing the challenge of turning around a slowing economy while fostering investments in infrastructure, energy and power.
The finance minister needs to take right steps to help reverse stagnant public and private investments, which are required to put the growth momentum back on track.
Economic growth has dropped to 5.5 per cent-lowest in seven years-and economists and experts say the country must alter years of "lower-than-desired" spending on infrastructure to become a middle-income nation in a decade.
Sustaining revenue collection growth, financing big budget, fending off inflationary pressure and improving the implementation capacity of development projects are other challenges the economic planner faces.
The budget, the second for the alliance government led by Awami League, is expected to focus on human resources development, rural development, job creation, and widening the social safety net.
"Reviving growth is a major challenge the budget must wrestle with," said Dr. Zahid Hossain, a senior economist at the World Bank.
Dr. Zahid, who spoke in his personal capacity, said economic growth declined by one-sixth in the last four years and growing energy and power shortages caused that decline.
In the upcoming budget, the energy and power sector will get bigger allocations in view of the severe crisis in electricity generation worsened by the shortage of fuel supply.
But the problem remains: the amount of subsidy for purchasing high-cost power from rental plants and subsidised agri-inputs could balloon, putting additional fiscal burden on the government.
Bangladesh Nationalist Party (BNP)--the main opposition-will attend this year's budget session, although it was not present on the day when the 2009-10 budget was placed before Parliament.
Mr. Muhith has already hinted that the size of this fiscal year's budget would be between Tk.1.30 trillion and Tk.1.32 trillion, an 18 per cent rise from the last budget.
The overall budget deficit should not go beyond 5.0 per cent-a target Bangladesh has maintained over the years.
Centre for Policy Dialogue (CPD), a think tank, has advised the government to loosen its public purse in an attempt to reverse the years of stagnation in investment that is pivoting around 24 per cent since 2004.
"The government should scale up public expenditure to help steer forward the wheel of development," said Dr. Mustafizur Rahman, executive director at CPD.
He said the good implementation rate of the outgoing annual development plan means that the government agencies have the capacity to spend higher allocation.
The ECNEC, the highest policy making body, okayed a Tk.385 billion annual development programme (ADP) for the next financial year, which saw an 18 per cent rise from the outgoing fiscal.
In the outgoing fiscal, the government unveiled a Tk 25 billion PPP (public-private partnership) budget to catalyse private investment in the infrastructure sector, but it failed to spend from the window.
To keep that in view, the finance minister may announce a fresh one with a smaller allocation of Tk 30 billion for the infrastructure investment.
In a shift to the traditional budget speech, the finance minister will make a power-point presentation in Parliament highlighting the details of major budgetary measures.
This will be the 39th national budget of the country and the 11th of the Awami League government.
The finance minister will also present the annual financial statement, supplementary budget, combined demand for grants, consolidated fund receipt and the Bangladesh Economic Review.
All the documents will be available on the web sites including www.mof.gov.bd, www.bangladesh.gov.bd, www.nbr-bd-org, www.plancomm.gov.bd, www.imed.gov.bd, www.bdpressinform.org and www.pmo.gov.bd
Top government officials, politicians, economists, senior journalists, business leaders and members of the diplomatic corps and international agencies are expected to attend the budget session.