Target more export, remittance

The government plans to boost exports by promoting large industries and send a record number of migrant workers abroad to raise foreign currency reserves.

"There will be a surprise in the upcoming budget in terms of support for large industries," said Finance Minister AHM Mustafa Kamal.

Besides, additional funds will be set aside for the poor and low-income people reeling from the rising cost of living amid high inflation.

The minister shared his thoughts with The Daily Star on Monday as he prepares to place his fourth budget in the Jatiya Sangsad tomorrow.

"We will support large industries that are capable of making and selling products in other countries ...

"We will promote 'made in Bangladesh' products and facilitate the manufacturing of products elsewhere [by Bangladeshi large industries] to meet the global demand. We will produce cars for export," he noted.

The minister, however, did not elaborate on the support to be extended to large industries.

Seeking anonymity, a finance ministry official said the assistance might include both tax relief and policy support.

The size of the next budget could be Tk 678,064 crore.

The revenue generation goal may be Tk 433,000 crore and the National Board of Revenue could be tasked with collecting Tk 370,000 crore.

The budget deficit may amount to Tk 245,064 crore or 5.5 percent of the gross domestic product, meaning it will be above the 5 percent ceiling that Bangladesh had always maintained until the Covid pandemic forced the government to increase spending despite lower-than-expected revenue generation.

The budget comes at a time when Bangladesh, like other economies, is facing the twin challenges of higher consumer prices and strain on the foreign currency reserves.

The Russia-Ukraine war has intensified volatility and is threatening to derail the recovery trajectory.

But Kamal is hopeful of keeping the country insulated from the crisis and his confidence stems from the outward movement of migrant workers as global economies reopen.

"We will send abroad the highest number of migrant workers this fiscal year."

Nearly eight lakh migrant workers went abroad in the first 10 months of the current fiscal year, comfortably exceeding the number a year ago. And Kamal expects the figure to hit 10 lakh before this fiscal year ends on June 30.

"Western economies will require additional workers once the war in Ukraine comes to an end. We are going to set a manpower export goal of 15 lakh in the upcoming fiscal year," he mentioned.

Another comfort for Bangladesh comes from the fact that the country's export-oriented items are consumed mostly by low and middle-income groups in the destination countries.

"We don't produce high-value items much. Our exports will not be affected," Kamal said, adding that the country's export earnings would hit $50 billion this fiscal year.

Owing to higher import bills against moderate exports and slower remittance inflow, Bangladesh's foreign currency reserves have taken a hit recently.

Kamal, however, said, "The reserves are still at a comfortable level. And we will soon raise it to $50 billion."

As prices of essentials are likely to stay at higher levels in the coming months, the government has decided to support one crore families hit hard by raging inflation that rose to an 18-month high in April.

"We are initiating safety net projects. The beneficiaries will not have to come to us to seek aid. Rather, we will take measures so that they can get the assistance in the convenience of their homes," said Kamal, referring to money transfers  through mobile financial services.

The finance ministry official said the total allocation for the safety net programmes might be Tk 113,000 crore or 2.5 percent of the GDP. The bill on the universal pension scheme is also likely to be placed in the budget session.

The official further said that in the next fiscal year, the government may offer opportunities to bring back the money that was generated in Bangladesh but was laundered abroad.

Under the facility to be offered for the first time, those who transferred money abroad through trade under-invoicing may get the chance to bring it back by paying 7 percent tax as penalty, said the official.

"This scope will be available only for the next fiscal year."