Parliament on Tuesday passed the Tk568,000 crore national budget for the 2020-21 fiscal year, scheduled to go into effect from July 1.
Though elaborate discussions take place on the proposed budget every year, the parliamentary budget session passed the new budget after a brief discussion due to the coronavirus pandemic.
This year, the overall discussion on the main and supplementary budget lasted around five hours.
On June 11, Finance Minister AHM Mustafa Kamal placed the highly ambitious budget in Parliament with the slogan, "Economic Transition and Pathway to Progress".
To bridge the budget gap, a real headache, the finance minister banked on increased borrowing from banks while economists questioned the revenue target of Tk330,000 crore for fiscal 2020-21.
However, both the finance minister and the prime minister on Monday told the House that the government was determined to implement the national budget for the upcoming 2020-21 fiscal year despite the coronavirus hurdles.
At the post budget press conference, Mustafa Kamal said the government did not think about the source of funds for the budget because saving lives was the top priority amid the coronavirus pandemic.
"We will spend first, and think about earnings later," he told the press.
To widen the spending space, Kamal increased the budget deficit to a record Tk189,990 crore, which is 6 percent of the country's gross domestic product, surpassing the typical "red line" of a 5 percent gap.
To bridge the gap, the government will manage Tk84,983 crore from bank borrowing and net Tk76,004 crore from foreign loans.
For the 2020-21 fiscal year, the minister set an 8.2 percent GDP growth target -- the highest in a decade -- despite the bleak economic outlook presented by experts both at home and abroad.
The target is much higher than the forecasts made by the International Monetary Fund (IMF), World Bank and Asian Development Bank (ADB).
The new budget prioritizing education, transportation and interest payments raised health sector allocation by 23.44 percent to Tk29,246 crore compared to the previous year. On top of that, the government kept Tk10,000 crore aside as a lump sum amount to respond to pandemic-driven circumstances.
For the first time, budget allocations for transportation and communication, and power and energy were reduced in comparison with the previous year. Allocations for local government and rural development, housing, industries and economic service were also lower than the revised 2019-20 budget.
Earlier on Monday, Parliament passed the Finance Bill 2020, providing breathing space for both general and rich taxpayers and allowing scope for black money to be whitened. Though the virus-hit businesses requested the finance minister for some changes in tax and VAT law, he did not budge from his decision.
The government slightly raised allocation for development spending to Tk215,043 crore – 6.27 percent higher than in the revised development budget for the outgoing 2019-20 fiscal.
The amount covers a Tk205,145 crore Annual Development Programme allocation and Tk348,180 crore spending for non-development expenditure.
Parliament on Tuesday also passed the Appropriations Bill, 2020, seeking a budgetary allocation of Tk7,59,642 crore.