Budget for FY2011-12 | The Daily Star
12:00 AM, June 10, 2011 / LAST MODIFIED: 12:00 AM, June 10, 2011


Budget for FY2011-12

Promises and challenges

The finance minister has placed the proposed national budget for the incoming FY 2011-12. We are making our preliminary comments on the budget pending more detailed commentary on its major aspects in due course.
In this third budget that he has prepared under the Awami League-led government it is also the largest in size at around Tk 1.63 trillion in the country's history. It is a highly ambitious budget and the finance minister also spoke with a note of optimism as he placed it at the Jatiya Sangsad (parliament).
The national budget being the most important economic policy tool of a government, let us see how it is going to translate its policies, its political commitments and goals into decisions on what revenue target it has set, how it plans to raise it and how it plans to use these funds to meet the country's competing needs.
In broad outlines, the budget for the incoming fiscal 2011-12, has, as it did in the outgoing fiscal year, identified power and energy as the thrust sector with an allocation of Tk. 83.11 billion for power and fuel. In fact, to infuse more dynamism in agriculture and industry, the policy of pumping additional power into the grid and the assurance of devising an appropriate energy policy including that of coal, promotion of the use of Liquefied Petroleum Gas (LPG) will, hopefully, contribute significantly to that end. Similarly, increased subsidy in agriculture at Tk 57 billion with and 70 per cent subsidy on food indicate the government's enhanced level of sensitivity to the issue.
Of the budgeted amount, revenue is expected to bring Tk.1.2 trillion, of which Tk.920 billion or 75 per cent of the resources will come from revenue sources. It is certainly a significant leap forward in mobilising internal resources to meet national expenditures. Understandably, this has been further necessitated by ever dwindling flow of foreign aid . That makes challenges of meeting revenue target of the next fiscal a real challenge.
The target of achieving Gross Domestic Product (GDP) growth at 7 per cent in the next fiscal will require the capacity to manage intenal as well as external shocks.
Falling level of remittance due to political uncertainties in the Middle East, our major destinations of the migrant labour, rising level of inflation, especially caused by hike in food prices in the domestic as well as in the international market have posed another formidable challenge to fiscal management.

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