budget analysis 2010
TRANSCRIPT
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BUDGET 2010-11
(Total outlay of TK. 1, 32,170cr proposed)
Introduction:
Budget is generally being arranged for a Fiscal Year of a country. In the
Fiscal Year 2010-11 Bangladesh Finance Minister Abul Maal Abdul
Muhith proposes a budget for Bangladesh. The step for making the budget
has been taken on 11 May. Then it has been proposed on 10 June in the
Parliament. The budget has been made keeping the target to make a
Bangladesh with high performing growth supported by advanced and
innovative technology with prices of commodities stabilized, income and
human poverty brought to a minimum level, health and education for all
secured and capacity building combined with creativity enhanced, social
justice established, social disparity reduced, participatory democracy firmly
rooted and capacity to tackle the adverse effects of climate change achieved.
Information and communication technology will by that time take us to new
heights of excellence giving the country a new identity to be branded as
Digital Bangladesh. In order to realize the vision, in the last budget
speech, implement various short, medium and long term policies and
strategies, plans, programs and projects have been taken for the direction of
achieving our goals. Eventually, prepare a Perspective Plan covering a
period from 2010 to 2021 for making a DIGITAL BANGLADESH
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Graphical Representation of the Proposed Budget
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Macroeconomic Scenario of the country:
The world economy was close to a collapse due to the recent global
economic crisis. However, the global economy has turned around and
recovered from recession faster than expected. The process and pace of
recovery, however, varied in different regions of the world. In the recovery
process, the developing Asian economies made remarkable strides.
According to the latest forecast, the world economic growth is expected to
reach 4.2 percent in 2010 whereas it shrank to 0.6 percent in 2009.
According to this economic outlook, the growth of developing Asian
economies has been projected at 8.7 percent in 2010. In the case of South
Asia, it will be 7.4 percent. In 2009, among five ASEAN countries,
Malaysia and Thailand experienced negative growth, Philippines recorded a
growth of 1 percent and Indonesia and Vietnams growth was around 5
percent. According to the final computation, Bangladesh recorded 5.7
percent growth in FY2008-09 in place of the estimated 5.9 percent growth. Ishall inform Parliament of the macro-economic trends in the current
financial year in my discussion on various macroeconomic indicators later in
my speech. In brief, these are (1) our export posted a growth of 19 percent
in April 2010, (2) from available information, it is expected that Boro-
Aaman will register growth and potato and maize will yield good harvest.
Other agricultural produces including fish and meat are having higher
production, (3) private sector credit flows grew by 19.5 percent while
industrial term loan recorded a growth of 42.5 percent. We also know that
the growth of combined credit flows to agriculture and SME sectors are in
the neighborhood of 20%, (4) during July-April period of the current fiscal
year based on L/C opening, import of capital machineries and raw materials
increased by 54 and 12.5 percent respectively, (5) domestic demand has
increased by around 25 percent. We have to admit that two important sectors
of the economy showed weak performance. We know that although supply
is increasing in the power and energy sector, it cannot cope with the growing
demand. Besides, manpower export though increased in the context of the
trends prior to 2006, it fell compared to 2007 and 2008 and even compared
to 2009. Considering these, we estimate that overall economic growth in
FY2009-10 will be 6 percent.
Import-Export Scenario of the country:
While export of commodities and services had shrunk by 20.4 percent
globally due to economic downturn in 2009, Bangladesh managed to
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achieve a 10.3 percent growth in export. This is obviously a commendable
achievement for Bangladesh. As recently has occurred the global recession
export earnings have increased by only 1 percent during July- April of
FY2009-10. On the other hand due to recession the Import also has declined.
While imports shrank by 12 percent in the developed countries and by 8.4
percent in the emerging and developing economies, import growth of
Bangladesh stood at 4.1 percent in 2008-09. Beside this scenario a good
news is that by opening L/C the import of capital machineries and raw
materials has increased by 54 percent and 12.5 percent respectively, which
represents a good economical condition for the future of country.
Public Private Partnership:
According to my opinion, Public Private Partnership (PPP) is very important
for the development of a country. Govt. has taken some steps to strength this
relationship. Agreements have been signed to construct 4 power plants on
rental basis with a capacity of 300MW and two 200 MW peaking power
plants under the PPP. Five land ports out of the 13 commissioned under the
PPP have begun their operations. Steps have been taken to run the
management of new mooring container terminal at Chittagong and of
another one at Mongla under joint public and private ownership. The pre-
qualification of the bidders of the Elevated Expressway in Dhaka has just
been completed.
Revenue-Expenditure of the budget 2010-11:
In Fiscal Year (FY) 2010-11, total estimated revenue income will be Tk.
92,847 crore, which is 11.9 percent of GDP. Of this, the estimated NBR tax
revenue will be Tk. 72,590 crore (9.3% of GDP). The estimated tax revenue
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from non NBR sources will be Tk. 3,452 crore and from non-tax sources Tk.
16,805 crore (2.6% of GDP).
On the other hand, the total expenditure has been estimated at Tk. 1, 32,170
crore. This is 16.9 percent of GDP and 19.6 percent higher than the revised
allocation for FY 2009-10. In the coming year, allocation for non-
development budget stands at Tk. 93,670 crore (12.0 percent of GDP) and
for ADP it is Tk. 38,500 crore (4.9 percent of GDP).
Financing:
Overall budget deficit will be Tk. 39,323 crore, which is 5 percent of GDP.
The deficit will be financed up to Tk. 15,643 crore (2 percent of GDP)
from external sources and Tk. 23,680 crore (3 percent of GDP) from
domestic sources. Domestic financing includes Tk. 15,680 crore (2 percent
of GDP) from banking sources and Tk. 8,000 crore (1 percent of GDP) from
non-banking sources, the major portion of which will come from National
Savings Certificates. Like in the previous years, this year also, we are
attaching preference to concessional external financing having fewer
conditionality.
Expenditure Framework:
We may classify the ministries and divisions under three major categories
depending on their allocation of business:
1. Social infrastructure
2. Physical infrastructure
3. General service sector
In the proposed budget, 33.3 percent of total outlay has been allocated to
social infrastructure of which, 23.9 percent is allocated to human
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development (education, health, science and technology and other related
sectors). Allocation of 30.4 percent of total outlay has been proposed for
physical infrastructure of which 16.9 percent goes to wider agriculture and
rural development, 7 percent to overall communication sector and 4.6
percent to power and energy. 21.1 percent of total outlay has been proposed
for general service sector that includes an allocation of 9.6 percent of total
outlay for PPP projects, cash incentives for various industries and
implementation of last years pay commission. Apart from these three major
categories, the rest 15.1 percent will be spent for interest payment and net
lending, wherein the share of interest payment is 11.1 percent. An acceptable
policy to rationalize the limit, amount and interest rates of borrowings will
be taken.
Budget at a glance:Before explanation of the budget in a table. This tableis given below:
DescriptionBudget
2010-11
Revised
2009-10
Budget
2009-10
Actual
2008-09
Revenue and foreign grants:
Revenue statement:
Tax revenue
NBR Tax revenue
Non-NBR Tax revenue
Non-Tax Revenue
Foreign grants/1
92,847
76,042
72,590
3,452
16,805
4,809
79,484
63,956
61,000
2,956
15,528
3,742
79,461
63,955
61,000
2,955
15,506
5,130
64,098
52,867
50,214
2,653
11,231
2,123
Total 97,656 83,226 84,591 66,221
Expenditure:
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Non-Development Expenditure
Non-Development revenueexpenditure of which
Domestic Interest
Foreign Interest
Non-Development Capital
Expenditure /2
Net Outlay for food accountOperation
Loan & Advance Net/3
Structural Adjustment Expenditure
Development Expenditure
Development programmes Financedfrom Revenue Budget/4
Non-ADP Project
Annual Development Programme
Non-ADP FFW and Transfer/5
85,786
75,230
13,271
1,438
10,556
241
3,223
150
42,770
1,498
1,578
38,500
1,194
77,129
68,711
13,255
1,391
8,416
60
1,188
332
31,817
1,009
1,180
28,500
1,127
77,243
69,504
14,471
1,337
7,739
326
1,631
332
34,287
1,420
1,228
30,500
1,139
64,428
61,103
13,839
1,341
3,326
62
1,833
122
21,618
393
558
19,372
1,295
Total-Expenditure: 1,32,170 1,10,52
3
1,13,81
9
88,064
Overall Deficit: -34,514 -27,297 -29,228 -21,843
(in percent of GDP) -4.4 -3.9 -4.2 -3.6
Overall Deficit: -39,323 -31,039 -34,358 -23,966
(In percent of GDP) -.50 -4.0 -5.0 3.9
Financing:Foreign Borrowing-Net
Foreign Borrowing
AmortizationDomestic Borrowing
Borrowing from Banking SystemLong-Term Debt(Net)
Short-Term Debt(Net)
Non-Banking Borrowing(Net)National Saving Schemes
Others/6
10,834
15,968
-5,13423,680
15,680
12,570
3,110
8,000
7,477523
9,972
14,492
-4,52017,325
8,661
6,511
2,150
8,664
8,407257
8,673
13,215
-4,54220,555
16,755
12,577
4,178
3,800
3,277523
2,580
7,245
-4,66519.257
13,793
9,900
3,893
5,464
3,496
1,968
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Total- Financing 34,514 27,297 29,228 21,837Memorandum item GDP 7,80,290 6,90,571 6,86,730 6,14,943
Some Key Points:
In this section some key points will be discussed like Power, Agriculture and
Rural development, Livestock, Water Resources, Food Security,
Communication Model, Roads and Bridge, Science and Technology- Digital
Bangladesh, Women Empowerment and Children Welfare, Culture,
Religion, Industry and Trade, Climate Change etc. Now let discuss about
these points on which, how much the Budget has been proposed.
Power: The whole country is facing the power crisis as the industries,
offices, Shopping Mall are very dependent on the Electricity and Gas Power.
To make a solution of this is very necessary. For this reason Budget shows a
good future of this sector as govt. has realized the fact.
2010 792 MW
2011 920 MW
2012 2269 MW2013 1675 MW
2014 1171 MW
2015 2600 MW
On the other hand to protect instant lack ness of electricity
everywhere will be used the energy saving light.
For this reason if Govt. becomes success to implement it, it will be a
great success of the Govt. If they take necessary steps to make it possible we
believe that its possible without any hesitation. As we have a Coal cave.
The Total US is running with only 3 Coal cave. Its enough to run our
country with this Coal cave if u makes it done.
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Agricultural Development:
Bangladesh is very dependent on Agriculture. An allocation of Tk. 4,000
crore for subsidy in agricultural sector in the budget for FY2010-11 has been
proposed.
Another major input of agriculture is seed. Under the program of supplying
high yielding variety seeds to the farmers, in FY2010-11, targets have been
fixed to produce and distribute 1,18,450 MT and 84,838 MT of high
yielding variety of seeds through Bangladesh Agricultural Development
Corporation (BADC) and Agricultural Extension Department respectively.
Besides, actions are being taken to increase the capacity of seed storages
from 40,000 MT to 1, 00,000 MT. In 2010-11, we have adopted schemes to
grow hybrid paddy in 12 lakh hectares and salinity resistant Bri-47 in 50
percent of salinity affected 10 lakh hectares of land.
A plan to expand irrigation facilities in the southern part of Bangladesh by
utilizing surface water, mitigating water logging problems in the south-west
region and widening the area of cultivable land and facilitating multi-crop
production through draining out water in Haor areas, propose an allocation
of Tk. 300 crore in the next fiscal year.
Propose to allocate Tk. 7,492 crore, for development and non-development
budget combined, for the Ministry of Agriculture in FY 2010-11.
Livestock:
In FY2010-11, production target for cattle and poultry vaccine has been
fixed at 41.63 crore doses. A project called Modernization of Vaccine
Production Technology and Expansion of Research Center is being
implemented to increase the production and supply of vaccines. Steps have
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been taken to establish regional duck reproduction farms and hatcheries to
increase supply of chicks at a reduced price. To implement this, propose to
allocate Tk. 861 crore, development and non-development budget combined,
for fisheries and livestock sector in the next fiscal year.
Post and Telecommunication: Digital Bangladesh:
Due to the sincere efforts of the Government, teledensity is increasing
rapidly in the country. At present, teledensity has gone up to 38 in every 100
persons and the number of internet users to 6 in every 100 persons. Besides,
in the last budget speech we made another pledge to connect Bangladesh
with the 2nd sub-marine cable network. For this new sub-marine cable
connection, a licensing policy has already been prepared and public opinion
has been sought. With the objective of installing optical fiber line to
facilitate nationwide internet connectivity as 37 Second Sub-marine Cable
New and Modern Airport Development of Existing Airports promised, steps
have been taken to extend broadband connections to 200 upazilas by
bringing them within the fold of optical fiber network through the Next
Generation Network (NGN) based Telecommunication System Project for
Bangladesh. Two WiMAX licenses have been issued for providing speedy
broadband services. 4409 Union Parishad bhaban will be brought under
optical fiber network. Steps have also been taken to establish 1 crore land
phone connections across the country and turn 8 thousand rural post offices
in phases into Community Information Centers (CIC) within a short span of
time.
Summary of the total discussion:
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Budget is a huge thing to describe in this few pages. Now let see the
summary of the total discussion. That is which commodities price will be
high and which will get less price, VAT exclusion, higher VAT etc.
Price might get decreased Price might get increased1. Powder Milk
2. Country made Refrigerator
3. Country made Motorcycle
4. Coconut Oil
5. Energy Saving Light
6. CNG vehicles
7. Plastic Shoes, Suji(create
from Wheat.)
Vacuum cleaner, air filtering
system, printer, color photo paper,
plastic lens, LED, Agar, Chocolate
milk, Mango milk, Imported Air-
conditioned tools etc.
1. Car, Microbus etc.
2. Flat, Housing
3. Cigarettes
4. Sugar
5. Juice, Fruit Drinks
6. Mineral Water
7. Foreign Motorcycle
8. Tiles, Mujaik, Bathtab,
Shampoo, Medicine, Soap,
Cosmetics, Shoe and Sandle,
etc.
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