The government is planning to prepare an emergency budget for the next fiscal with extra allocations to procure and manufacture vaccines and expand social safety net.
The government initially had decided to allocate another Tk10,000 crore Covid-19 emergency fund for procuring and manufacturing of vaccines in the financial year 2021-22.
Officials of Finance Division of the Ministry of Finance said the government has no option other than dragging the Covid-19 emergency fund into the next fiscal if the current pandemic conditions deteriorate to a ‘third wave’ as situations in India ‘have been worsening.’
“We have a big plan to expand our social safety net in the ensuing ‘emergency budget’ as Power and Participation Research Centre and the Brac Institute of Governance and Development survey reported that about 2.45 crore of people of the country got below poverty line due to the second pandemic wave,” said an official who is now involved in making the next national budget.
Sources in Finance Division said their macroeconomic wing and budget wing are now preparing for the next ‘Budget Management Committee and Coordination Council on Foreign Exchange’ virtual meetings supposed to be held today (Sunday). Finance Minister AHM Mustafa will preside over the meeting.
Finance Minister said, “Life cannot be stopped by the effects of Coronavirus pandemic.A goal must be reached by tackling everything springing out of that situation.”
He said many of the government’s priority projects are going to be completed next year. “There will be no slackening in the timely release of funds for those projects.”
He insisted that the concerned divisionswould be more active to fulfill the revenue collection target.
Hinting at the priorities of the ensuing budget, he said, “The new budget of the government will include guidelines, programs and necessary allocations to ensure employment generation in the economy.”
The next budget will also have proposals to attract domestic and foreign investment, as well, he pointed out.
Meanwhile,Finance Division officials said they slashed the Coronavirus budget by 15 percent or Tk1,500 crore despite of alarming rise in Covid-19 cases. Those funds have moved to the expatriates’‘income incentives funds’.
Some Tk10,000 crore that was set aside exclusively to provide emergency response to deal with the Covid-19 pandemic in the current budget was reduced to Tk8,500 crore, according to Finance Division sources.
Bangladesh is now maintaining a nationwide lockdown and that the government is assessing the initial loss of that unprecedented situation. Therefore, it is not possible to determine the fund size for social safety net for next budget, sources said.
Now, the social safety net revised outlay is Tk 95,574 crorefollowing an initial estimates made before the second wave of Coronavirus hit Bangladesh in late March. This figure could go up to Tk 125,000 crore, or up by 30 per cent.
Meanwhile, health and foreign ministries have been talking about importing and manufacturing of the Russia’s Sputnik V vaccine,on an emergency basis.
The World Bank’s $500 million (Tk 2,250 crore) Covid-19 emergency response fund could be used in the next budget, Finance Division sources said.
The government will continue this year the compensation packages for the frontline Covid-19 fighters who were affected or lost lives. A fund of Tk 500 crore has been formed to this end.
According to the Finance Division, the families of more than 100 deceased employees have been compensated under this fund. Besides, the doctors and nursesserving in the COVID-19 dedicated hospitalsare now receiving two months basic salary allowances from an allocation of Tk 150 crore. An incentive package of Tk 1,500 crore is being implemented to create employment.
The government may roll out a budget of Tk 5, 93, 313 crore for the ensuing fiscal as against expiring fiscal’s budget of Tk 568,000 crore.
In the new budget, the revenue collection target has been set at Tk 3,83,700 crore.Besides, foreign assistance has been projected at Tk 82,000 crore.
According to sources in the Finance Ministry, the GDP growth target for the next financial year has been set at 7.70 percent. In the new budget, the deficit could go up to 6.50 percent as against the current budget’s deficit of 5.8 percent.
The government has set a target of keeping the inflation rate around 5.5 percent. The Finance Ministry may present the new budget before the Parliament in the first week of June.
