BGMEA University of Fashion and Technology

Assignment
on
A critical review on budget 2020-21

Submitted to Submitted by
Md. Mizanur Rahmam Md. Shuvikuzzaman
Head of the dept. of tem, buft ID: 171-006-0-165

Submitted on: 08/07/2020

A critical review on budget 2020-21

The novel coronavirus pandemic has created extraordinary circumstances and an
extraordinary mission is called for to win the war of containing and defeating the
pandemic and rebounding from the socio-economic upheavals suffered. The
circumstances in which the national budget for the fiscal year 2020-21 is to be
prepared are, therefore, very different from the usual and the challenges
formidable. Yet, the budget prepared is expected to guide socio-economic
development efforts in the coming year to help rebuild the economy and
regenerate social and economic dynamics towards restoring the country's
pathway of robust national progress experienced prior to the appearance of
Covid-19.

Education:

Finance Minister AHM Mustafa Kamal allocated Tk 66,400 crore for the education
sector for the 2020-21 fiscal year.

He allocated Tk 24,937 crore for the primary and mass education ministry, Tk
33,118 crore for secondary and higher education division and Tk 8,345 crore for
technical and madrasa education division.

The amount makes up 11.69 percent of the total outlay and its share in the GDP
stands at 2.09 percent.

In the current budget, the allocation for the education sector was Tk 61,118 crore
and it was 11.68 percent of the total budget and 2.10 percent of GDP, according to
budget documents.

Kamal in his budget speech said that normal education of about 4 crore students is
being hampered due to the coronavirus crisis. "In the next fiscal it will be
important for us to make up the education loses in the education sector. We have
ensured enough resources to make up the loss in the budget" Kamal said, without
giving any specific guidelines.

A Campaign for Popular Education (CAMPE) rapid survey came out on June 3 in
which 126 NGO and teaching representatives gave their feedback, predicting
increased dropouts and resulting in child marriages due to fallout from the
coronavirus pandemic.
Of the respondents, 84 percent said dropouts will increase at schools, 72 percent
said malnutrition will impact learning ability, 71 percent said child labour will
increase and 58 percent said early marriage will increase.

Against this backdrop, the educationists called for at least a 15 percent allocation
of the budget for the education sector, to continue the success in the sector and
curb any kind of "catastrophic" situation.

They sought more funds for chalking out and implementation of a two to three-
year-long Covid-19 response and recovery plan for the education sector.

"This is a traditional education budget. With the allocation, it will not be possible
to recover the learning loss due to Covid-19," CAMPE executive director Rasheda
K Choudhury said.

She hoped that the government will address the issue in the revised budget and
education, health and human resource development will get their due priorities.

Brac University Professor Emeritus Manzoor Ahmed proposed that the

government should make a special allocation of Tk 5,000 crore for upazila-based
recovery and rescue plan from the coronavirus crisis for the education sector in the
next budget.

Unesco also recommends spending 6 percent of GDP in the education sector.

Educationists say that the government expenditure on education as a proportion of

GDP has been hovering around 2 percent for the last several years, which is lower
than many other South Asian countries.

In fact, the education sector's share in the budget has been falling for the last few
years -- in the revised budget of the 2010-11 fiscal year, for example, the figure
was 14.3 percent.

Health:
The Finance Minister AHM Mustafa Kamal has proposed an allocation of Tk29,247
crore for the health services and health education in the budget presented in the
parliament today for the fiscal year 2020-2021.
 
The health budget this year has been hiked by 23.44 percent from the revised
budget of Tk23,692 crore for the fiscal year 2019-20.
 
The allocation has been increased, keeping in mind that part of the fund will be
spent on dealing with the pandemic, said the Finance Minister. 
 
Apart from that, the government has proposed Tk10,000 crore to be kept aside as
"lump sum" amount to deal with any emergency health crisis and meet the
healthcare needs in the fight against the Covid19 pandemic.
 
An Integrated Health-Science Research and Development Fund of Tk100 crore has
also been proposed to help develop research in the health-education and science
technology sectors.
 
A "high-powered" committee will be formed comprising expert physicians,
nutritionists, public health and sociologists to ensure proper and effective use of
the fund. Health economists, environmentalists and civil society members will
also be engaged.  
 
"It is worth mentioning that currently 13 ministries and divisions are
implementing programmes related to health and family welfare," said the finance
minister.  
 
In total, as much as Tk41,027 crore will be allocated for the public health sector
for the next fiscal year, which is 1.3 percent of the Gross Domestic Product and
7.2 percent of the total budget.

Agriculture:
Finance Minister AHM Mustafa Kamal on Thursday proposed an allocation of Tk
9,500 crore as subsidy for agriculture sector in the upcoming fiscal.

Besides, he set aside Tk 200 crore as incentives for farm mechanisation.

“We’ve taken some important steps to maintain the growth in agriculture, and thus
ensure food security for our people. Subsidy in the agriculture sector has been
increased to Tk 9,500 crore,” the minister said while placing the proposed national
budget for the fiscal year 2020-2021 in Parliament. 

He said they have taken up a Tk 3,198 crore project to promote farm

mechanization. “An allocation of Tk 5,000 for the Agriculture Refinancing
Scheme will also be made through Bangladesh Bank in the next fiscal year.”

In addition, the minister said, they have raised the target for government
procurement and distribution of rice and paddy by 2 lakh metric tons in FY 2020-
21 to make sure that farmers get fair prices for their produces while the retail
market price of rice remains stable.

Meanwhile, another refinancing scheme of Tk 3,000 crore has been announced for
small income farmers and traders in the agriculture sector.

As in previous years, the minister said, the sales price for chemical fertilisers will
be kept unchanged in the next fiscal year irrespective of their import costs, and
they will continue to provide incentives to the agriculture sector.

Manufacturing Company (RMG & Textile):

Finance Minister AHM Mustafa Kamal has proposed to continue with the
additional export incentive of 1.0 per cent in the next fiscal year in addition to
other existing incentives.

Placing the proposed budget for the fiscal year 2020-2021 on Thursday, he said the
government has kept on providing all kinds of benefits, including cash incentives,
to the readymade garments (RMG) industry as it is the principal export sector of
the country.

An additional 1.0 per cent export incentive is being provided to all categories of
RMG exports from FY2019-20, as per a UNB agency report.
However, due to the growing trade tensions and the recession in world economy, a
downturn in global goods trade in 2019 and 2020 has been forecasted.

Therefore, Kamal said, overall exports from Bangladesh, including that of RMG,
have continuously been declining.

Due to a reduction in demand in developed countries, he said, RMG export this

year is showing a negative trend compared to the previous year.

The Finance Minister said exports will reduce further in the coming days due to the
global lockdown amidst the outbreak of coronavirus.

However, he said, it is expected that the RMG industry will see a rebound with the
support from the stimulus package being offered by the government to counter the
COVID-19 pandemic.

The Finance Minister also hoped that export will return to the desired positive
trend in FY2020-21.