Govt sets 7.7% GDP growth for next year

The government is estimating a 7.7 percent GDP growth in the 2021-22 fiscal year, up from the existing 5.2 percent, despite worldwide economic fallout amid pandemic.

Nine issues, including Covid-19 vaccination issue, will get priority in the next budget – allocation for which is already expected to be 10 percent bigger than the current fiscal, according to the documents of two meetings of the budget management committee and fiscal coordination council, held on Thursday.

The council held the meetings separately on the virtual platform zoom. Finance Minister AHM Mustafa Kamal, who is now in Singapore, joined the events virtually. Secretaries of different ministries also attended the meetings.

An official of the Finance Division, who attended the meetings but did not want to be named, said more funds will be allocated for vaccination programmes to reduce the threat of Covid-19 and for providing incentives and compensations in the health sector.

As per the meeting documents, the agriculture sector will be given funds for automation; incentives to subsidise seed, irrigation, rehabilitation programmes; and subsidies to grow additional food.

Different government ministries and divisions will also work to create employment opportunities and ensure development of the rural economy, the meetings discussed.

Other priorities are expansion of the social safety net programmes, construction of homes for homeless people (in line with the Mujib year), food for low income people, and development of human resources.

The Finance Division official said the Division had also wanted to know the progress of funds allocated under the first incentive package – Tk121,000 crore.

More funds will be allocated under the next incentive package to tackle the second wave of coronavirus, he added, referring to the meetings.

Contacted, Dr AB Mirza Azizul Islam, finance adviser to a past caretaker government, said, “The target of achieving a 7.7 percent GDP growth is not practical due to the economic fallout of deadly coronavirus pandemic.”

The investment and production are very low in the country due to the crisis of raw materials caused by economic shutdown in many foreign countries, he pointed out.

He questioned: “How can the Finance Division estimate such GDP growth in this condition?”

The size for the fiscal year 2021-2022 budget is expected to be around Tk592,565 crore, up from revised outlay Tk538,221 crore set in the FY 2020-2021 budget.

At an event on finalising the 8th Fifth Year Plan recently, Prime Minister Sheikh Hasina directed the finance ministry and other related ministries and divisions to formulate a second fiscal stimulus package plan keeping in mind the second wave of Covid-19.

The stimulus packages had been announced at different times after March. The government declared 21 stimulus packages involving more than Tk 1,21,000 crore to weather the pandemic fallout, 39.23 percent of the total amount, or Tk 47,615 crore was disbursed until October 31.