Kamal says government didn’t think about how to fund budget amid pandemic

AHM Mustafa Kamal has said the government did not think about the source of fund for the FY21 budget because saving lives was the top priority amid the coronavirus pandemic.

The finance minister briefed the media on Friday after unveiling the Tk 5.68 trillion budget with a hope to achieve 8.2 percent GDP growth in the next fiscal year in parliament on Thursday.

“We didn’t think about from where the funds would come. Lives must be saved; jobs must be created; rural and macro-economy must be revived. We will bring the money no matter how much we will need,” he said.

“Considering these things, we will spend first, and earn later. We must save lives first. Then we can [think about] funds,” Kamal said.

The finance minister noted that the second budget he has planned is not a normal, traditional one.

Finance Minister AHM Mustafa Kamal delivering the budget speech for 2020-21 fiscal year in parliament on Thursday. Photo: PID

The virus crisis also created obstacles to getting enough data to make the budget, he said. “We had to work in a different way,” the minister said.

So, what was the different way to set the growth target?

Analysing the data from the past achievements, Kamal answered.

Bangladesh’s economic growth was robust in past few years.

But setting a big target amid the pandemic just after downsizing the estimated growth of the current fiscal year has surprised many. Some economists described it as “fantastical” and “impossible to achieve”.

“Not many countries were able to achieve growth at this level. Only China and India had so much growth,” the finance minister said.

Bangladesh will be able to achieve the GDP growth target if it can tackle the COVID-19 crisis well, he added.

The minister did not back off from the huge growth target despite the bleak economic outlook presented by experts both at home and abroad.

To widen the spending room, Kamal increased the budget deficit to a record Tk 1.9 trillion or 6 percent of the country’s gross domestic product, surpassing the typical “red line” of 5 percent gap.

To bridge the budget gap, a real headache, Kamal is banking on increased borrowing from banks while economists questioned the revenue target of Tk 3.78 trillion.