Budget not a typical one: Kamal

Finance minister AHM Mustafa Kamal on Friday said the government did not think about sources of funds for budget, because it proritised saving lives, amid the pandemic.

"… Lives must be saved. Jobs must be created," the finance minister said.

He made the remarks while addressing the online post-budget news conference.

Saying the budget is not typical, the finance minister explained: "In routine budgets, we first plan for earnings and spend later, but this time we have thought inversely".

He, however, said the government will explore every option available both at home and abroad on how to get funds to meet the deficit of Tk. 5.68 trillion budget.

An auditor by training, Mr Kamal said the budget he placed is "implementable as he believes the situation will start to improve from September next.

Replying to a question on higher bank borrowing, the finance minister said the banking sector landscape has changed now.

"We used to hear about the liquidity crisis in the banking sector but that no longer exists," he added.

"Is there any instance that clients were refused to get money from banks?" he questioned.

Bangladesh Bank governor Fazle Kabir supported his claim, revealing the surplus fund in the banking system was Tk. 1.13 trillion at the end of April.

The BB governor said the higher borrowing will not be a problem since the central bank has already provided the government with Tk. 740 billion to meet the budget deficit of the outgoing fiscal year.

The governor said the central bank has injected Tk. 400 billion into banks as refinancing for bankrolling stimulus packages.

The finance minister expressed the hope that private investment will increase next year as many foreign companies have showed interest in investing in Bangladesh.

He said the foreign companies will get the same treatment as local industries do.

"We have indentified the obstacles to FDI. And we have addressed it," he said.

The finance minister said 17 economic zones are at the final stage and there will be huge investments as the government will provide every sort incentive they need.

He said the lending rate capped at 9.0 per cent is also conducive to fostering industrialisation.

Turning to the capital market, the finance minister said the government does not pursue boosting the market artificially.

"We believe if the economy performs well, it will have a positive impact on the stock market," he said, adding the budget has proposed many measures to improve the market.

Mr Kamal admitted the market has been performing poorly even before the coronavirus struck Bangladesh.

Noting that revenue earning is much lower in proportion to the country's GDP, the finance minister said it is possible to raise taxes more than the projection only by automating the collection system.

The finance minister said agriculture also has been prioritised in the budget as per the instruction of the prime minister.

"We have to discover the agriculture in a new way," agriculture minister Dr Abdur Razzak said.

He said the farm sector has been given priority so that there can be no food crisis during the pandemic.

Energy adviser Toufique Elahi Chowdhury said the US government has borrowed US$ 6.0 trillion to fight the coronovirus. "This is one-third of its GDP," he said, while supplementing the question related to higher bank borrowing.

Replying to a question on higher revenue target, the NBR chairman Abu Hena Md Rahmatul Muneem, said the target is challenging due to the COVID 19.

"If there were no pandemic then the target would have been achievable," he said.