1500Published on June 10, 2022
The government plans to increase incentives and subsidies in the proposed budget for the Fiscal Year 2022-23 to alleviate inflationary pressures in the local market.
Finance Minister AHM Mustafa Kamal on Thursday placed the budget proposal for the fiscal year 2022-23 in the national parliament. He proposed an initial allocation of Tk 82,745 crore for subsidies and incentives, which was Tk 53852 crore in FY 2021-22.
As a result, the allocation for subsidies and incentives is increasing by 53.75 percent in the proposed budget.
Due to rise in prices of fuel and fertilizer in the international market, the government had to increase subsidy/incentive expenditure on fuel, electricity, gas, and fertilizer.
The finance minister said, “Now, in the third year of the pandemic, our priority will be to sustain the economic recovery by maintaining the trend of income generation and job creation and thus put the economy on a solid foundation. Therefore, we will continue to implement incentive programmes in the next fiscal year.”
“At the same time, we will provide all kinds of policy support to all the important sectors of the economy including banks, financial institutions, and business enterprises in the industrial and service sectors so that they could fully overcome the effects of pandemic,” added the finance minister.
“This expenditure has been increased to Tk 82,745 crore (1.90 percent of GDP) in the initial estimate of the budget for FY2022-2023. However, considering the price trend of oil, gas, and fertilizer in the international market, the estimated subsidy/incentives spending can be 15-20 percent higher than the initial estimates, which may pose a challenge in the budget management for the next fiscal year,” the minister further said.