Finance Minister M. Saifur Rahman Thursday proposed a Tk 697.40 billion national budget for fiscal 2006-07, with an overall deficit of Tk 146.90 billion.
The deficit will be met by both domestic and foreign borrowings.
The revised budget for fiscal 2005-06 is estimated at Taka 610.58 billion as against the original budget Taka 643.83 billion.
The revised budget includes non-development expenditure of Taka 370.57 billion and development expenditure of Taka 236.26 billion compared to the original outlay of Taka 380.82 billion and Taka 265.54 billion respectively.
The finance minister expressed the hope that the Gross Domestic Product (GDP) might grow by 7.0 per cent in the coming financial year. The country's GDP grew by 6.70 per cent in the outgoing fiscal (2005-06).
He pledged to continue reforms, curb poverty, generate employment and expand trade and commerce to build a happy, self-reliant, vibrant and prosperous Bangladesh.
The finance minister said the proposed budget would help the government to improve public welfare, enhance agricultural and industrial growth, further streamline macroeconomic framework making it strong and reduce the cost of doing business in the country.
Stating that the budget was not meant for financing election campaign, Saifur said the budget deficit would come down to 3.2 per cent of the GDP including grants or Tk 146.90 billion However, in absolute money term, the deficit will be up by Tk 9.76 billion from that of the 2005-06 fiscal.
The size of the proposed budget is 15 per cent of the estimated Tk 4.653 trillion GDP.
The target of revenue receipt in FY 2006-07 is Tk 525.42 billion, which is 11.30 per cent of the GDP and is 17 per cent higher than the revised target of revenue collection in the outgoing FY 2005-06. Finance minister argued increased revenue is necessary to accelerate economic growth and is vital for enhancing the standard of living of the people.
Out of the Tk 677.40 billion proposed expenditure, the non-development outlay is Tk 422.86 billion.
Saifur proposed a Tk 260 billion Annual Development Programme (ADP) for the next fiscal that would account for 5.6 per cent of the GDP and will be 21 per cent higher than the revised ADP for the outgoing financial year. Since Tk 19.82 billion would be made available from the revenue budget for financing employment generation schemes, and another amount of Tk 4.81 billion for Food-For-Work programmes, the total development expenditure will stand at Tk 284.63 billion, or 6.1 per cent of the GDP.
The finance minister, the pioneer in streamlining Bangladesh's economy in line with free market and globalisation process, cited many successes of the ruling Bangladesh Nationalist Party and its partners. Because of the success in health and education sectors, in terms of Human Development Index, said the minister, Bangladesh has already risen to the position of a middle category country."
The minister proposed an allocation of Tk 110.93 billion for education and technology sector in the FY 2006-07, which is 20 per cent higher than that in the revised budget. The government has been implementing a long term "Strategic Investment Plan for Health, Nutrition and Population" which has an allocation of Tk 324.50 billion for the period 2003-2010 years.
Saifur said for FY 2006-07, the health sector would receive a total of Tk 47.84 billion, which is 16 per cent higher than the allocation made in the revised budget.
The agricultural subsidy will increase by Tk 1.0 billion to Tk 12 billion in the next financial year. The minister also proposed Tk 2.44 billion for agricultural research schemes.
As part of the expanded safety net programmes for the poor and disadvantaged population, the minister also proposed increased allowances for senior citizens, acid-burnt victims, physically handicapped people, fully retarded persons and insolvent freedom fighters.
The finance minister termed Small and Medium Enterprises (SMEs) as extremely important for the progress of the private sector entrepreneurs, human development, poverty reduction and employment generation and declared that SMEs would receive funds in the coming financial year.
He said a Tk 1.0 billion refinancing scheme has been taken up by the Bangladesh Bank, and the World Bank and the Asian Development Bank will provide US$ 40 million to support the scheme.
The minister proposed an allocation of Tk 0.50 billion for supporting the natural disaster-affected small farmers to enable them to come out of cycle of privation.
Saifur mentioned several times the upward spiralling of fuel oil prices in the international market and argued that Bangladesh has to tackle the problem to overcome economic challenges. He said he had consulted with experts, civil society members and business leaders from different strata who "unanimously agreed that raising the prices of fuel oils is necessary and unavoidable."
Mentioning that "economic diplomacy" was an important aspect of the government's foreign policy, the minister said, Bangladesh's image was brightened abroad through sending peacekeeping missions. The earning from such missions will stand at Tk 15 billion in the coming financial year, said Saifur.
The minister told the House that the government has enacted 150 laws. He, however, expressed his anguish as the implementation of some important projects were being delayed and seriously jeopardised by a "spurt in the number of court cases and delay in their disposal."
He urged the parliamentarians to undertake further reform of the existing laws. "Without this reform the implementation of development projects and collection of revenue in terms of billions of taka will remain stuck in the cobweb of procrastination and legal complexities."
Referring to global challenges that the government confronted when assumed power in 2001, Saifur said, Bangladesh has successfully faced and weathered global recession, globalisation of economy, natural disasters and unprecedented high oil prices in the international market.
Dependency on foreign aid began to reduce and the share of internal resources in financing ADP started to increase as the BNP government took reform programmes in its first term during 1990s, said Saifur.
"Bangladesh is no more a country of despair. This is a country of hopes and potentials," Saifur asserted, taking pride in his government's successful handling of external shocks and internal political disturbances.