Overall subsidy, incentive may go up slightly

Food subsidy likely to decrease by Tk104cr in next budget

Shakhawat Hossain | Published: 00:38, Mar 24,2019 | Updated: 02:15, Mar 24,2019


The overall allocation for subsidy and incentive in the next budget is likely to increase slightly, but subsidy on food may decrease by Tk 104 crore.
Officials said that the government provisionally estimated that the overall allocation for subsidy and incentive would increase to Tk 42,100 crore in 2019-20 from Tk 37,804 in the outgoing financial year.
The finance ministry wanted to keep it within 1.5 per cent of GDP, they said.
The officials said subsidy for power was likely to increase by Tk 300 crore to Tk 9,500 crore.
The food subsidy, which marked a sharp rise in FY19 to Tk 4,604 crore against the backdrop of crop loss, is likely to decrease by Tk 104 crore to Tk 4,500 crore in the next budget.
Food minister Abdur Razzaque, however, said that there was no question of reduction in food subsidy in the next budget.
He told New Age on Saturday that they would demand higher allocation and subsidy for the sector.
‘It was imperative to increase the amount of subsidy for the overall food security in Bangladesh,’ he noted.
Finance ministry officials said that subsidy to miscellaneous sector was likely to see the highest rise to Tk 9,600 crore from Tk 5,500 crore.
They said that the incentive for the agriculture sector was likely to remain unchanged at Tk 9,000 crore.
The contribution of agriculture sector to projected 8.3 per cent GDP growth in the outgoing financial year would fall to 3.51 per cent compared to 4.19 per cent in FY18.
Cash incentive for export oriented sector like readymade garments, pharmaceuticals, ceramic products, frozen foods is also likely to remain unchanged at Tk 4,000 crore, said the officials.
Besides, incentive for jute and jute goods may also remain unchanged at Tk 500 crore in FY20.
Bangladesh Jute Goods Exporters Associations senior vice-president Lutfur Rahaman said that a large amount of cash incentive kept in the budget of the current financial year might remain unrealised because of slump in exports of jute and jute goods.
Export earnings from jute and jute goods in July-February of FY19 fell by 24.36 per cent to $560.56 million from $741.12 million in the same period of FY18.
Lower demand for jute and jute products in the global market and anti-dumping duty imposed by India on locally grown jute goods were mainly responsible for the sluggish trend, said the exporters.

Want stories like this in your inbox?

Sign up to exclusive daily email