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Agriculture to get increased subsidy in next budget

May 30, 2021 00:00:00

Government subsidies in the upcoming budget for the fiscal year 2021-22 are likely to increase by almost Tk 100 billion (10,000 crore) with the agriculture sector slated to get the highest allocation, official sources said on Saturday, reports UNB.

The agriculture 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 Finance Ministry and the National Board of Revenue (NBR).

They hinted that the total subsidy amount for the next fiscal might reach Tk 490 billion, up from Tk 386 billion in the current budget.

This amount is almost 8.0 per cent of the proposed Tk. 6.02 trillion budget, said the sources.

An amount of Tk 95 billion was earmarked for subsidising the agriculture sector, they said.

Finance Minister AHM Mustafa Kamal will place the budget on June 3 in 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 Tk 3.89 trillion, where Tk 3.30 trillion will be contributed by the NBR.

Power sector will get a subsidy of Tk 90 billion, Liquefied Natural Gas (LNG) Tk 85 bilion and Tk 73 billion for export support.

Expatriate workers will continue to get incentives as the budget may propose an amount of Tk 40 billion in subsidy in this sector. This is up from Tk 30 billion in the ongoing fiscal year.

The government is providing 2% incentives on their total amount of remitted money to encourage expatriate Bangladeshis to send money through legal channel.

During the pandemic the inflow of remittance increased surprisingly despite fear of a slowdown.

According to Bangladesh Bank data, Tk 175.34 billion came in April, Tk 162.05 billion in March, Tk 151 billion in February and Tk 166.37 billion in January.

The amount in food subsidy would be Tk 65 billion.

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 programmes _ 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 the economic activities.

So far the government has announced 23 packages involving Tk 1.24 trillion which is over 4.0 per cent of the GDP.

The power sector subsidy is needed as the government buys at a higher from the private operators, selling at a lower price to the pubic users.

The same is the case for the LNG as it imported at a higher price.

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