Budget news 2011 & 2012 BD | News Live News

Budget news 2011 & 2012 BD | News Live News

Today finance minister of Bangladesh published bd budget 2011, 2012

Budget news 2011 & 2012 BD

Power section, stocks section, poverty cut at heart and others. AMA Muhith's Tk 1.63 trillion outlay rose by about 25 percent on what the government has spent this year. The government's last chance to see through its pledges, as the finance minister had said, saw a sharp fall in farm spending with visible emphasis on revitalising the stock market and boosting the power sector.
In times of a complex economic situation combined with a volatile political one, AMA Muhith unveiled a Tk 1.6 trillion budget for fiscal 2011-12 year on Thursday, increasing spending on key sectors by nearly a third to tackle power shortages.
The finance minister hoped to see an unprecedented growth of 7 percent in the economy—which remains doubtful given the wobbly economic situation—and mentioned that this year it had been at an impressive 6.7 percent.
In the only economic policy document of the government, he expected inflation to ease a touch to 7.5 percent against a revised target of 8 percent this year. Inflation towered to a 31-month high of 10.67 percent while foreign currency reserves are fast depleting on the back of higher import costs and rising fuel subsidies.
While revenues would make up for 56 percent of the expenditures, much of the shortfall — 27 percent of the budget — would be made up mostly by borrowing from local banks.
However, there has been negligible change in terms of proportional contribution of the different revenue sources with direct taxes accounting for less than a fourth of the revenues (23.28 percent) and indirect taxes accounting for about 29 percent.
The total development outlay stands at Tk 460 billion with an increase of 19.5 percent.
Muhith told parliament spending on power and transport will see an increase of 31 percent on this fiscal year to Tk 460 billion in the new fiscal year beginning on July 1.
Development spending for 2012 will be hiked 28 percent, officials said, taking it to a record $6.4 billion, with $1.2 billion earmarked for the power sector and $1.1 billion for improving transport infrastructure.
Of the amount, 60 percent would be made available by the government and the rest sourced from overseas. Overall spending will increase 23 percent, he said.
The government aims to cap its deficit at 5 percent of GDP in 2011-12, up from a revised 4.4 pct in the outgoing fiscal year.
The finance minister's proposal to exempt stock investors from producing tax identification number (TIN) and to continue the existing tax exemption on proceeds from shares are likely to reassure the small investors about the government's intention to keep the capital market buoyant.
Staying with capital reforms, Muhith mentioned the initiative of demutualization of the Dhaka and Chittagong Stock Exchanges in an effort to "contain market manipulation".
However, there has been negligible change in terms of proportional contribution of the different revenue sources with direct taxes accounting for less than a fourth of the revenues (23.28 percent) and indirect taxes accounting for about 29 percent.
Total revenue from taxes, as a proportion of all revenues, have in fact been projected to decrease next year to about 81 percent from just above 83 percent this year.
The power sector saw an increase of almost 20 percent as the finance minister outlined a plan to increase power generation by almost three times adding 7,800 megawatts to the national grid by 2013, with 29 plants under construction and tender process for another 31 under way.
Considering the dearth of natural gas, the government has decided to build power plants powered by diesel, furnace oil while coal is also in the picture.
"A pre-feasibility study has been carried out for installation of coal-fired power plants in Bangladesh. Accordingly, we have finalised a plan to install coal fired power plants after 2014."
One of the more notable pledges that the ruling Awami League government had made in the run-up to the last the general elections in 2008 amid a global food crisis was food sufficiency by 2013.
"We are attaching highest priority to enhancing the production of domestic food grains to meet the demand for food of the large population of our country," Muhith said but went on to propose Tk 45 billion for subsidies, down from Tk 57 billion from last year.
The overall agriculture budget decreased over 12 percent while that for defence increased almost 29 percent, which is incidentally the largest rise among all major sectors.
Most of that money will likely go towards increasing Bangladesh's military firepower and salaries of defence personnel. Besides training the three forces to increase their efficiency, Muhith said, the government has been 'trying to procure modern equipment and modern technology-based military hardware and to enhance other benefits for the defence forces'
Belying speculations that banks will get a tax break, corporate tax rates will remain unchanged except for the companies producing cigarettes.
"For the sake of public health, the rate for cigarette manufacturers [is proposed] to be increased to 42.5 per cent to discourage smoking," the finance minister said in his budget speech Thursday.
Bank stocks went up Wednesday and Thursday riding largely on report that corporate tax will go down to 40 per cent for commercial banks.
source bdnews24.com

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