Sector-Wise Allocations In Budget

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The national annual budget for the fiscal year 2014-15 was unveiled in Parliament by the Finance Minister on 5th June 2014. The TK 2.5 trillion ($32.42 billion) budget is 12% bigger than the revised budget for the last fiscal year which stood at TK 2.2 trillion. In this development update, we look at the various allocations which have been made to a number of important sectors which are crucial for achieving the government’s goal of 7.3% growth in GDP in the current fiscal year:

In 2009, around 50 million people were poor, of which 2.8 million were ultra or extreme poor. In the five years which passed since, despite a 1.16% population growth, the number of poor people have been brought down to 38.5 million and the number of ultra poor has been brought down to a little over 1.5 million. Thus, in five years, 45% of the ultra poor have been pulled out of the clutches of extreme poverty.
Although initially the government’s target was to reduce poverty to 13.5% by 2021, in light of the successes in the last five years, this target has now been revised so that the target is to reduce poverty to 10.2% by 2021. As for extreme poverty, the government’s target is to eradicate it by 2018. To that end, apart from the various allocations for sectors which impact upon people’s wealth and income, TK 1.5 billion has been specifically allocated for programmes and projects to eradicate extreme poverty by 2018. The measures being adopted include:

  • – Enhancing capacity of ultra poor to face poverty by providing them with special allowances;
  • – Creating employment and self employment opportunities for the hardcore poor through micro credit operations;
  • – Ensuring food security for the hardcore poor by providing food assistance free of cost or at a nominal cost;
  • – Creating capacity of hardcore poor to deal with poverty by providing them with education, training and healthcare services.

Safety net and welfare schemes have been allocated TK 139.74 billion, which is 23% higher than the allocation of last fiscal year. The proposed outlay constitutes 5% of the TK 2.5 trillion budget for 2014-15 fiscal year.
Over the last five years, the government has adopted and implemented a number of social safety programmes such as stipend programme, special stipend programme for the physically challenged students, allowances for insolvent disabled persons, old age allowances, allowances for widows and divorced women, allowances for expecting and lactating mothers, food for works programme, test relief, gratuitous relief, food assistance for destitute mothers, char (off shore islands) livelihood project, one house one farm project, special allowances for Hijla (hermaphrodites) dalit (backward Hindu castes) and other neglected segments of society and so on. These poverty reduction social protection programmes will be continued in the current fiscal year too.
Additionally, steps have been taken for addressing the housing problems of marginalized sections of society. For instance, works are underway for providing houses for accommodating the cleaning staffs of Dhaka City Corporation. TK 500 million has been allocated for similar programmes in other divisional and district towns. The government has almost finalized the “National Social Protection Strategy” and steps have been taken to prepare a list of hardcore poor and a “National Population Register” for proper identification of beneficiaries of social safety net programmes.

In its last tenure, the Awami League led government placed top priority to food security. Necessary allocations had been made to this sector to implement the National Food Policy and Bangladesh Country Investment Plan (CIP) 2009. There was adequate supply of food at fair price in the market throughout the government’s last tenure because of efficient management. In the present term, the government’s aim is to ensure food safety and its equitable distribution. In its last tenure the government planned to enhance the storage capacity of food warehouses to 2 million metric tons by 2015. Already the government has achieved to store the requisite quantity before time. The government now plans to increase the capacity to 2.5 million by 2025. TK 16.85 billion has been allocated for the food ministry.

Country’s education sector received the highest allocation of TK 292.13 billion for fiscal year 2014-15. Of the allocation, TK 136.73 billion has been allocated for primary education and TK 155.4 billion for tertiary and higher education. In his budget speech, the Finance Minister outlined the government’s plans to implement most aspects of the Education Policy 2010 in the next four years.

Attention would be focused on improving the quality of education; adopting modern technology based teaching methods and continuing adequate infrastructure building. There will also be an initiative to improve the teacher-student ratio to an acceptable level. Madrassah education will be modernized to bring them in line with mainstream education, such as by introducing IT skills. Emphasis will also be laid on imparting vocational and technical education. Currently technical schools are being built in each Upazila. This is expected to be complete soon. There are plans to introduce vocational training courses at secondary and higher secondary school levels.

Innovative techniques are being considered and employed to give students the best possible outcome from their education. Discarding the traditional curriculum which encouraged rote learning without proper appreciation for lessons, the government has introduced creative questions in examinations. Universities are going to be built in every district of the country. The government has plans to formulate a Primary Education Policy, reorganising school management committees and Upazila and city education committees as well as implementing the Non-Formal Education Policy.

Within the broad coverage of Basic Literacy Programme throughout the country, there are plans to provide 4.5 million illiterate adolescents and people belonging to the age group of 15-45 years with basic literacy and livelihood training. Pre primary education has been introduced at all primary schools. The government has formulated an inclusive education manual for the mentally disabled children and people living in inaccessible areas. The relevant teachers have been trained on the manual.

In his budget speech, the Finance Minister outlined the government’s plans to produce skilled workforce, both for the local market as well as abroad. According to the plans, the government will produce a total of 260,000 skilled people for the local market in the next three years, and 1 million skilled people for the overseas market in the next 15 years. For the local market, the government has identified five growing sectors as requiring immediate influx of skilled labour: garments, construction, information technology, light engineering and ship building. TK 500 million has been allotted specifically for implementing the commitment of creating skilled workforces.

Despite the technological advancements, agriculture still forms one of the principal sectors of our economy and essential for our overall wellbeing. The Finance Minister in his budget speech proposed an allocation of TK 90 billion for the fiscal year 2014-15. The Minister outlined the government’s plans for the next year regarding this key sector:

  • – Subsidies for fertilizer, seeds, irrigation and other agricultural inputs will continue
  • – Share-croppers will continue to be provided with collateral-free agricultural loan. Moreover, agricultural loan and input assistance will continue. In addition, a database containing all information of farmers will be established
  • – Agricultural Rehabilitation Assistance and Incentive Programme will continue as before
  • – Supply of high yielding seeds to the farmers will be increased further
  • – Special emphasis will be given on innovation and use of organic technology and genetic engineering
  • – Development of agro- based industry will be encouraged with right incentives
  • – Agricultural research will be given highest priority as before. Like jute, steps will be taken to decode genome sequence of other cash crops. Again, research for inventing drought, salinity and water logging resistant high yielding varieties will be intensified. Special attention will be given to minimize the adverse effect of climate change while conducting agricultural research and emphasis.

Regarding fisheries and livestock, the Finance Minister outlined the following plans of the government for the coming days:

  • – Programmes for increasing commercial production of egg, fish, meat, milk etc. will continue
  • – Ongoing integrated actions to increase the production of national fish Hilsha will continue
  • – The National Shrimp Policy, 2014 will be formulated as soon as possible
  • – Steps will be taken to ensure sustainable management of aquatic resources in the newly earned 1 lakh 11 thousand 631 square km of territorial sea at the Bay of Bengal.
  • – Genuine fishermen will be registered and provided with identity cards
  • – Cooperatives will be encouraged
  • – Manufacturing vaccine for domestic animals, providing veterinary treatment, developing species through artificial insemination will continue.

As for rural development, the government has plans to transform each union parishad w into a vibrant habitat with all modern civic amenities. Works are underway to connect 2051 growth centres with district headquarters. Modern education, electricity, health care, pure drinking water, sanitation, agro-based industry will be made available in rural areas that will facilitate establishment of small township and suburbs. The government is moving forward with a master plan spanning up to 2021 to develop a rural road network.

It plans to build 5000 km of new road, repair and maintain ten thousand km of pucca road, build, repair and maintain thirty thousand metres of bridges and culverts. These initiatives will widen road network coverage in rural areas from 32.15 percent to 33.80 percent. The ministry in charge of undertaking the aforementioned projects, namely the LGRD ministry, has been allocated TK 154.64 billion for the fiscal year 2014-15.

Allocation for power and energy sector has been increased 17% for the 2014-15 fiscal year. This sector received a total allocation of TK 115.4 billion as compared to the revised allocation of TK 99.02 billion from last fiscal year. In his budget speech the Finance Minister pointed out that power generation target was re-fixed at 24,000 MW instead of 20,000 MW by 2021 considering the growing demand and increasing generation capacity. He added that steps have been taken to raise power generation capacity to 18,162 MW by 2017.
A special allocation of TK 4 billion has been kept for financing renewable energy based power plants. The Finance Minister promised that every household will get electricity within next five years. He assured that the target to achieve 100% power coverage by 2019 will be made a success through implementation of long and medium-term plans. He outlined the government’s plans in this regard for the next 5 three years:

  • – To take initiatives, apart from increasing domestic production, to generate and allocate power through bilateral, multilateral and regional agreements with neighboring India, Bhutan and Nepal
  • – To raise generation capacity to 18,162 MW of electricity by 2017
  • – To establish coal based power plants with a generation capacity of 1426 MW by 2017 which will shift the burden from gas which contributes to 78% of power generation in the country
  • – To establish two nuclear power plants at Ruppur with a total generation capacity of 2000 MW of electricity
  • – To produce 800 MW of electricity by 2015 using renewable energy
  • – To install more than 60,000 pre-paid metres to ensure efficiency, transparency, and accountability in power management.

Regarding the energy sector, the government has plans to enhance the capacity of BAPEX. Special emphasis will be laid on discovery of new gas and oil fields. In addition, scope of assistance and cooperation with international organisations to explore new gas and oil fields in the coastal and deep sea areas will be widened. Alongside, necessary steps will be taken to dig 21 wells in order to enhance gas generation capacity by 2015-16. Initiatives will be adopted to reduce the misuse of gas by enhancing managerial efficiency in this sector. There are plans to establish an LNG terminal and necessary infrastructure in Maheshkhali Island.

Separate allocations have been kept for the following communications infrastructure building priorities of the government: Padma Multipurpose Bridge; Construction of a tunnel underneath the Karnaphuli river in Chittagong; Conversion of nationally important highways into four lanes gradually; Continuation of investment to reform and modernise railways; Construction of circular rail road track around Dhaka city; Construction of the 3rd Sea port at Payra in Patuakhali; Construction of a sea port and an LNG terminal at Moheshkhali; Making Biman a profitable organisation by improving its management and enhancing the capacity of passenger transport. For the fiscal year 2014-15, the communications infrastructure sector has been allocated TK 231.36 billion.

TK 111.46 billion has been allocated to the health sector which marks a rise from last fiscal’s allocation of TK 90 billion. In its last tenure, the Awami League government took the initiative to build 13,500 community clinics, one each for every 6 thousand people, with a view to extending the health care facilities to the grass root level. As of now, service delivery has begun at 12, 557 community clinics while 943 clinics are still under construction. The government plans to deliver maternal health care services through these clinics. The government’s ultimate goal is to reduce maternal mortality rate down to 143 per 10,000 live births.

The government is aiming to raise average life expectancy to 72 years by 2021. At the same time, they will strive to provide easy access to reproductive health service delivery system to reduce birth rate. The government is also working on expanding tele-medicine service. Moreover, special measures are being taken to introduce social health insurance programme, as early as possible, in order to bring down the medical expenses within the affordability of the poor.

Attempts will be made to enhance the skill of healthcare institutions and healthcare regulatory agencies. Initiative will be taken to build appropriate regulatory framework and enhance institutional and technical facilities for controlling the quality of herbal medicine. The National Drug Policy 2005 will be updated and the drug testing laboratory will be modernized.

Apart from the major sectors outlined above, the budget also makes provisions for important social sectors:

The budget for fiscal year 2014-15 keeps a special allocation of TK1 billion for development of women. The Women Development Policy 2011 has been and will be the guiding document for women empowerment and their overall development in Bangladesh. In August 2013, Ministry of Women and Children Affairs formulated a national work plan for implementing the Women Development Policy, 2011. This policy clearly stated the responsibilities of each ministry/division regarding women development. 40 ministries took this document into consideration when preparing the budget for the fiscal year 2014-15.

TK 500 million has been allocated for children’s welfare programmes. In the next fiscal year, the government is committed ensuring the physical and mental development and fulfilling their nutritional requirements. The government has plans to update the National Children Policy in accordance with the UN Convention on Rights of Children. Child labour has already been banned during the last tenure and effective enforcement of the law is being closely monitored. The government plans to introduce child budget on a pilot basis from fiscal year 2015-16.

Budgetary allocation for anti corruption activities have been increased from TK 38 Crores in the outgoing fiscal year to TK 590 million for the current fiscal. In his budget speech, the Finance Minister reiterated the government’s commitment to fight graft and corruption. He pointed out that required amendments have been made in the Anti Corruption Commission (ACC) Act 2004 and that the ACC is now equipped with adequate manpower and logistics to be able to work more efficiently and independently than in the past. To raise mass awareness about the evils of corruption, ‘Corruption Prevention Committees’ have been formed in towns, districts and upazilas comprising respected citizens and 20,886 ‘Honesty Clubs’ have been formed drawing students from all levels of education.

In the proposed budget for fiscal year 2014-15, special attention has been devoted to people with disabilities. TK 200 million has been allocated to the trust established for people with neuro development disorders and TK 50 million to the trust established for the physically disabled. The Finace Minister assured that the National Foundation for Disabled will be upgraded to a Directorate immediately. The rate and coverage of stipends for insolvent disabled and disabled students will be enhanced to 400,000 and 50,000 respectively. The Minister also proposed increasing tax exemption income threshold for the disabled from TK 0.3 million to TK 0.35 million.

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