Allocation for subsidy will increase to Tk 827b

The government is going to increase the allocation for subsidy and incentive expenditure in the budget of fiscal year 2022-2023.

Finance minister AHM Mustafa Kamal on Thursday made the proposal while delivering the budget speech in the national parliament.

He said due to the rise in prices of fuel and fertilizer in the international market, this expenditure has been increased to Tk 827.45 billion (1.90 per cent of GDP) in the initial estimate, which was Tk 538.52 billion in FY 2021-2022.

Mustafa Kamal, however, considering the price trend of oil, gas, and fertilizer in the international market, the estimated subsidy and incentives spending can be 15-20 per cent higher than the initial estimates, which may pose a challenge in the budget management for the next fiscal year.

Despite the Covid pandemic, during FY 2020-2021, remittance earning was impressive.

"Due to the sluggish economic recovery in our major overseas labour markets because of the Covid pandemic and the ongoing Russia-Ukraine conflict, there has been stagnation in remittance earning in the current fiscal year," the finance minister added.