Total budgetary spending in the first six months of the current fiscal shrank 10.58 per cent year-on-year to Tk 141,514 crore due to the ongoing Covid-19 pandemic, according to a report from the finance ministry.
While presenting the report's findings in the parliament yesterday, Finance Minister AHM Mustafa Kamal said government expenditure for the period did not reach expected levels because of the prolonged coronavirus fallout.
However, steps have been taken to increase expenditure in the days to come, he added.
The expenditure target for the current fiscal year was set at Tk 567,999 crore or 17.91 per cent of the country's gross domestic product (GDP).
Of this amount, just 29.75 per cent has been spent in the first half of the ongoing fiscal year.
During the same period in fiscal 2019-20, total budgetary expenditure stood at Tk 158,260 crore, a 16.51 per cent increase from the previous year.
Non-development expenditure in the six months till December was Tk 107,947 crore, or 29.75 per cent of the total allocation.
This is 5.37 per cent lower than spending in the corresponding period in fiscal 2019-20, when it was Tk 114,076 crore.
Expenditure through the Annual Development Programme (ADP) in this period was Tk 33,300 crore or 16.23 per cent of the allocation.
This was 24.63 per cent lower compared to the same period of fiscal 2019-20.
Of the 10 ministries and government divisions that got a majority of the allocation, power division faced the steepest decline of 63.59 per cent.
Spending in the defence service division fell 30.66 per cent while it was 24.26 per cent for the rural government division and 8 per cent for the secondary and higher education division.
However, spending in the health service division witnessed the most growth with 11.51 per cent, followed by the science and technology ministry 10.89 per cent, primary and mass education division 5.72 per cent and railway ministry 5 per cent.
"The government also continues to hold negotiations with the World Trade Organisation as a part of its efforts to maintain Bangladesh's trade benefits as a least developed country (LDC) for a certain period following graduation in 2026," Kamal said.
To address the potential challenges of graduation, the government has taken steps to sign free trade agreements (FTAs) and preferential trade agreements (PTAs) to develop trade relations and increase exports with various countries.
While mentioning that 11 FTAs have already been signed, the finance minister informed that the signing of a PTA with Bhutan is complete while similar agreements were underway with Nepal and Indonesia.
A feasibility study is also underway to conclude a comprehensive economic partnership agreement (CEPA) with India.
The country's economy is recovering following the timely implementation of the government's incentive packages to address the Covid-19 fallout, economic transition, and vaccination programme, Kamal said.
"As the production of paddy was slightly less than the target last year due to floods and other natural causes, we have set a target of importing 1 million tonnes of rice this year to ensure food security and have allocated sufficient fund in the budget for this purpose."
"We have already finalised agreements to import five lakh tonnes of rice, of which 1.5 lakh tonnes of rice has already been imported and the remaining is on the way," he added.
These initiatives have helped sustain the supply of rice to local markets even though production has been slightly lower.
The minister also expressed his firm belief that the country is on the path of a successful recovery by overcoming the effects of Covid on the economy.
The government's strategies to recover from Covid-induced losses include increasing public investment in education, health and human resources, accelerate private investment, reduce poverty, expand export trade, tax management and reform in the financial sector.