Over 2022-23, India's growth will average 7 percent, the strongest among the largest economies, contributing 28 percent and 22 percent to Asian and global growth, Morgan Stanley, an American multinational investment management and financial services company, published in a report. India is best positioned within Asia to deliver domestic demand alpha. Its cyclical recovery will be sustained by structural factors. The recent strong run of data increases our confidence that India is well positioned to deliver domestic demand alpha, which will be particularly important as developed markets growth weakness percolates into Asia's external demand, says Morgan Stanley. Some observers argue that while the Russia-Ukraine war has definitely contributed to the misery of the west, this was set into motion during Covid-19 when the governments in these countries went on a massive spending spree to give economic stimulus, pushing inflation at a time when growth was slowing. These observers argue that the so-called economists were "pushing" India to follow the same path that these western countries took. They remind that some were glorifying USA's $3200 to everyone, Germany's stimulus and UK's furlough scheme -- trying to create dissatisfaction among Indian public and pushing the Indians to demand something similar. Eminent international economists were putting pressure on Indian government to spend 5, 10 or even 15 percent of entire GDP as stimulus. Other economists provided other varying and large amounts to be distributed without worrying for inflation. Despite repeated pressures from "fancy economists", intelligentsia, freeloaders, the government was fiscally prudent and knew the dangers that uncontrolled inflation can wreak on Indian economy and public. It repeatedly prioritized very careful spending and targeted stimulus only to those sections that desperately required it. Observers argue that today, India is the only large country which is not just at the minimum risk of inflation, but also exhibited a growth of 13 percent this quarter. The Central government under the economic adviser Sanjeev Sanyal repeatedly maintained the stand of fiscal prudence and providing stimulus to boost economy at "right time" and to "appropriate groups". Even Arvind Panagariya was in favor of government policies to maintain fiscal prudence. Observers say that strategy has paid off in a huge way. The fancy economists and intellectuals were prescribing policies to India that have now spelled a doom for the west. Fortunately, the team of economists under the government of India assessed the situation much better and did not cave into the immense pressure. Experts say that with passing time, more and more evidence as well as consensus is emerging that mindless stimulus did more harm in the long run even in those large economies which were fiscally surplus before the pandemic or were highly advanced. Morgan Stanley said the key change in India's structural story lies in the clear shift in the policy focus towards lifting the productive capacity of the economy. Policymakers have taken up a series of reforms which will catalyze an upswing in the private capex cycle, helping to unleash a powerful productivity dynamic, leading to the onset of a virtuous cycle. Cyclically, the economy is lifting off after a prolonged period of adjustment. The backdrop of healthy balance sheets and rising corporate confidence bodes well for the outlook for business investment, the report said. The biggest challenge that was emerging to India's macro outlook was the sharp spike in oil / commodity prices weighing on macro stability. However, with the 23-37 percent decline in oil / commodity prices since the March-22 peak, we think that macro stability indicators will head back towards the comfort zone. Against this backdrop, we project that RBI does not need to lift rates deeply into restrictive territory. In other words, RBI will not need to slow domestic demand growth meaningfully to control macro stability indicators, the report said. Source: The Economic Times  

Export earnings of the country has fetched a record height of US$52.082 billion in the last fiscal year (FY22) despite the unstable global economic situation mainly caused by the impacts of the COVID-19 pandemic and other global issues. According to the latest statistics of the Export Promotion Bureau (EPB), the country's export earnings witnessed an eye-catching growth of 34.38 percent in the last fiscal year (FY22) bagging US$52082.66 million exceeding the  strategic export target of $43500 million. The export earnings in the previous fiscal year (FY21) were 38758.31 million. The EPB figures revealed that out of the total export earnings of $52082.66 million registered in the last fiscal year (FY23), the bulk of $42613.15 million came from the RMG exports. Out of that volume, the highest $23214.32 million came from the knitwear exports while the second highest $19398.84 million came from woven garment export. Besides, in the last fiscal year, the country also bagged $1695.19 million from export of primary commodities, $1245.18 from export of leather and leather products, $1127.63 million from export of jute and jute-made goods. The single-month export earnings in last June also witnessed a staggering 37.19 percent growth grabbing $4908.03 million against $3577.49 million fetched in FY21. Source: BSS AH

The Ministry of Home Affairs on Tuesday informed Lok Sabha that the budget for the Indo-China border in the year 2021-22 under the Border Infrastructure and Management (BIM) has been increased six times as compared to the previous financial year. Responding to the question asked by Member of Parliament Dilip Saikia on the funds allocated by the Government in view of the security of border areas of the North Eastern States including Assam during the last three years, the Minister of State in the MHA, Nityanand Rai in a written reply mentioned that the funds allocated for the security of border areas of the NE States have been utilized within the stipulated time frame. He further provided the details of the funds allocated under the Border Infrastructure and Management (BIM) Scheme to secure border areas of North Eastern (NE) States including Assam during the last three years. The government has increased BIM funds for the Indo-China border areas from Rs 42.87 crore in 2020-21 to Rs 249.12 crore in 2021-22 i.e. around six times. The amount was Rs 72.20 crore in 2019-20. In a similar way, Rs 20 crore was allotted for the Indo-Myanmar border in the year 2019-2020, it was decreased to Rs 17 crore in 2020-21 but it was increased around three times to Rs 50 crore in the year 2021-22. He further replied that in the Indo-Bangladesh border, the budget for the year 2019-2020 was Rs 407 crore that was decreased to Rs 294 crore in the year 2020-21 but in the year 2021-22 it was marginally increased to Rs 303 crore. On being asked about the steps taken by the Government to strengthen the safety of border areas along with the borders adjoining neighboring countries, Rai replied that the Government of India has adopted a multi-pronged approach to strengthen the security along international borders, which inter-alia includes deployment of Border Guarding Forces along the international borders, effective domination of the borders by patrolling, laying nakas, manning observation posts, vulnerability mapping and holistic review of deployment periodically, establishing new Border Outposts (BOPs), deployment of surveillance equipment, strengthening of intelligence network, erection of border fencing and floodlighting and deployment of technological solutions in non-feasible areas like riverine gaps.   Source: ANI

The National Economic Council (NEC) today approved a Taka 2,07,550 crore Revised Annual Development Programme (RADP) for the current fiscal year (FY22) where transport and communication sector continued to enjoy the highest priority.    "The NEC approved a Taka 2,07,550 crore RADP for the currentfiscal year," said Planning Minister MA Mannan while briefing reporters after the meeting.    NEC Chairperson and Prime Minister Sheikh Hasina presided over themeeting virtually from her official Ganobhaban residence while Ministers, State Ministers and Secretaries concerned attended the meeting from the NEC Conference Room in the city's Sher-e-Bangla Nagar area and also from the Cabinet Division conference room at Bangladesh Secretariat.  State Minister for Planning Dr Shamsul Alam, Planning Commission members and secretaries concerned were present at the briefing.   Planning Division Secretary Prodeep Ranjan Chakrabarty said the RADP witnessed a Taka 17,774.14 crore cut (7.89 percent of original ADP allocation) from the original ADP outlay of Taka 2,25,324.14 crore.  The funding from foreign sources experienced the entire cut of Taka 17,774.23 crore to stand at Taka 70,250 crore while the funding from the local sources increased slightly to stand at Taka 1,37,300 crore.   However, considering the RADP allocation of Taka 9,613.68 crorefor the autonomous bodies and corporations, the overall RADP allocation for the current fiscal year (FY22) stood at Taka 2,17,163.68 crore.   The RADP size of the current fiscal year became Taka 9,907crore or 5.01 percent higher than the RADP size of Taka 1,97,643 crore in thelast fiscal year (FY21). Planning Minister Mannan said the day's RADP meeting highlighted six strong areas of the country's economy which are attaining nearly seven percent GDP growth in the last fiscal year, good performances of the agricultural sector, containing the general point to point inflation rate under control through ensuring the supply chain and sound management, handling the Covid-19 situation nicely compared to other countries of the world even the developed countries, maintaining the export market and the labour market and also about the government's step to roll out the universal pension scheme. Source: BSS AH

Finance Minister AHM Mustafa Kamal today expressed optimism of achieving targeted 7.2 percent GDP growth in the current fiscal year (FY22). The minister said this after a meeting of the Cabinet Committee on Government Purchase (CCGP). He said “In the current financial year, the size of the economy will be US$455 billion. Per capita income will reach US$2,785 this year.” The minister also hoped that the per capita income will reach $3,089 in the next fiscal year. Source: BSS AH

Finance Minister AHM Mustafa Kamal today (Monday) expressed his high optimism of achieving targeted 7.2 percent GDP growth in the current fiscal year (FY22) since the country is on the right path towards development.    "Earlier, the GDP growth target in the current fiscal year (FY22) was set at 7.2 percent. I believe that we'll be able to attain that," he said.    The finance minister said this virtually while replying to a volley of questions after chairing the 41st meeting on the Cabinet Committee on Government Purchase (CCGP).    Asked about the International Monetary Fund's (IMF) latest enhanced growth projection of 6.6 percent for Bangladesh in the current fiscal year (FY22) from its earlier projection of 6.5 percent made in October, Kamal said that the World Bank and the IMF always make conservative projections on such issues.    "But, the good news is that they have scaled up their GDP growth projection slightly to 6.6 percent from their earlier projection. This helps me to believe that we'll be able to attain 7.2% GDP growth this year. Insha Allah," he said.    The finance minister mentioned that the recent figures showed that country has attained growth in almost all sectors as the export earnings witnessed a growth of over 31 percent in November while the July-November export earnings posted a healthy growth of 24.3 percent.    He said the way export earnings are coming, the country is likely to fetch $47 to $48 billion from exports at the yearend which would also be a new milestone for Bangladesh.    He said although the inward remittance flow is a bit less now, but at the end of the year, it is likely to reach $21 billion.    Kamal, however, said that considering the two upcoming biggest festivals of the Muslims (Eids), the inward remittance flow is likely to touch $25 billion. "Hopefully, we'll be able to exceed $25 billion from export earnings in this year."   When asked about the attainments of Bangladesh over the last 50 years since independence, he said that the attainments over the years were not achieved at the same ratio.     The finance minister said it took around 38 years since independence to reach the country's GDP size to $100 billion, but the maximum attainments were made over the last 13 years under the dynamic leadership and farsighted thoughts of Prime Minister Sheikh Hasina.    He said that the country is moving ahead following the footsteps of Father of the Nation Bangabandhu Sheikh Mujibur Rahman while each and every citizen of the country wants to see more development of the country.    "We'll move ahead towards our desired goals through strengthening further our core areas of progress," he added.    The finance minister also expressed his firm optimism that Bangladesh would become a higher middle income country by 2030 and a prosperous developed country by 2041.    Replying to another question about the outcomes of the recent Road Shows organized by the Bangladesh Securities and Exchange Commission (BSEC) in different countries of the world, Kamal said he personally does not believe that this Road Shows were directly related to the development of the capital market.    But, he believed that these Road Shows have effectiveness as the whole world now do not have the same perception about Bangladesh that they have had earlier.     Kamal said people around the world think that the successes of Bangladesh is a miracle, but this is not a miracle, rather it is a reality.    He said earlier Bangladesh could not utilize fully its areas of potentials. "But, now under the dynamic leadership of Prime Minister Sheikh Hasina, Bangladesh has been implementing various plans like Five Year Plans, Perspective Plans and Delta Plan 2100. We think that we're in the right path,"    When asked about the proposal from the Bangladesh Bureau of Statistics (BBS) for procuring some 3.95 lakh tabs for conducting the next Housing and Population Census although it was not approved in the day's CCGP meeting, Kamal said that the Statistics and Informatics Division has been suggested to resubmit the proposal within 10 days with some more information.    Kamal said that it is taking time to approve the proposal since the government wants to go ahead with the locally made products bearing the "Made in Bangladesh" concept and philosophy.   He said the government wants to give scope to the local companies in this regard for which it is taking some time.    "The two companies (in tender bids) are local ones and we need more information only for a matter of clarity. We don't want to import those products which are produced locally as we want to stand on our own feet." He added. Source: BSS AH

Finance Minister A H M Mustafa Kamal said, there is no ‘weakness’ in the proposed 2021-22 fiscal year’s budget. He said this after participating the ministerial meeting of government purchase committee on Wednesday. The finance minister presided over the meeting virtually. Analysts have said that no facility has been kept for the low income people in the budget. What was the weakness of this year’s budget? While answering this question Mustafa Kamal said, there is no weakness in this year’s budget. I do not want to mention any particular segment. When the budget would be implemented then we can see who the beneficiaries are. We will be able to know about the beneficiaries. The questions that have arisen about the people- we have arranged the budget regarding that kind of people.   When asked about the media reports that around two and half crore people have turned poor recently, the finance minister said, we have our own institutions and they would look into the matter.  The finance minister also declined to accept the calculation about the new poor people given by different research organizations. AH     

Parliament on Sunday passed the Tk 5,23,190 crore national budget for the fiscal year 2019-20, themed as ‘Bangladesh on a Pathway to Prosperity: Time is Ours, Time for Bangladesh’. Finance Minister AHM Mustafa Kamal moved the Appropriations Bill, 2019 seeking a budgetary allocation of Tk 6,42,478.27 crore which was passed by voice vote. Following the proposal mooted in the House by the Finance Ministry for the parliamentary approval of appropriation of fund for meeting necessary development and non-development expenditures of the government, the ministers concerned placed justifications for the expenditures by their respective ministries, through 59 demands for grant. Earlier, parliament rejected by voice vote a total of only 484 cut-motions that stood in the name of opposition members on 59 demands for grants for different ministries. A total of nine MPs from Jatiya Party and BNP submitted their cut-motions on the budget. They were allowed to participate in the discussion on Secondary and Higher Education Division, Health Ministry, Agriculture Ministry and Disaster Management and Relief Ministry. Later, Speaker Dr Shirin Sharmin Chaudhury applied guillotine to quicken the process of passing the demands for grants for different ministries without giving the lunch break. Opposition and independent MPs were present at the House when the Appropriation Bill was passed in parliament and they did not raise any voice against passing of the bill. Finance Minister AHM Mustafa Kamal on June 13 placed a Tk 5,23,190 crore largest-ever budget for the 2019-20 fiscal with a focus on developing communications infrastructure and human resources and achieve the 8.2 percent GDP growth. The Finance Minister proposed allocating, from the annual development program, 27.4 percent for human resource (education, health and related others), 26 percent for communication (roads, rails, bridges, and related other communications), 21.5 percent for the overall agriculture sector (agriculture, rural development, water resources, and related others), 13.8 percent for power and energy sector and 11.3 percent for other sectors. The allocation proposed for the social infrastructure sector in the proposed budget is Tk 1,43,429 crore, and Tk. 1,64,603 crore for physical infrastructure sector of which Tk. 66,234 crore will go to overall agricultural and rural development, Tk 61,360 crore to overall communications, and Tk 28,051 crore to power and energy. The overall budget deficit will be Tk 1,45,380 crore, which is 5 percent of GDP like the previous year. In financing the deficit, Tk 68,016 crore will come from external sources and Tk. 77,363 crore from domestic sources. Of the financing from domestic sources, Tk 47,364 crore will come from the banking system and Tk 30,000 crore from savings certificates and other non-bank sources. The total revenue collection has been estimated to be Tk 3,77,810 crore where the National Board Revenue (NBR) will contribute Tk 3,25,660 crore tax revenue from non-NBR sources have been estimated at Tk 14,500 crore. Besides, non-tax revenue is estimated to be Tk. 37,710 crore. The total allocation for operating and other expenditures is Tk 3,20,469 crore, and allocation for the annual development program is Tk. 2,02,721 crore, while Tk 100 crore has been proposed to provide startup capital to promote all types of startup enterprizes among youths. A total of Tk 1,23,641 crore has been proposed for general services, which is 23.63 percent of total allocation. Tk. 33,202 crore is proposed for public-private partnerships (PPP), financial assistance to different industries, subsidies and equity investments in nationalized corporations, banks, and financial institutions. The budget also proposed introducing insurance for the expatriate Bangladeshi workers and their families as they often face financial losses and risks due to accidents and various other causes. For the sake of a strong capital market which is required for any strong economy, the Finance Minister proposed making tax free the dividend income from the listed companies' up to Tk 50,000. With a view to promoting business and investment, augmenting export and creating employments, he proposed tax holiday facility to continue and also to include some potential manufacturing sectors such as agricultural machinery; furniture; home appliance - rice cooker, blender, washing machine etc.; mobile handset; toys; leather and leather goods; LED television and plastic recycling. Along with the standard VAT rate of 15 percent, there will be reduced rates of 5 percent, 7.5 percent and 10 percent for specific goods and services. As a special measure, considering the sensitivity of the product, the rate of VAT at the trading stage of pharmaceutical and petroleum products shall be 2.4 percent and 2 percent respectively. A total of Tk 79,486 crore was allocated in the proposed budget for the education and technology sector, which was 15.2 percent of the Tk 523,190-crore budget. The Finance Minister said necessary funds have been earmarked in the proposed national budget for 2019-20 fiscal year for enlisting new schools in the Monthly Pay Order (MPO) scheme which remained suspended for a long time. He proposed allocating Tk. 24,040 crore for the primary education sector, Tk. 29,624 crore for the secondary and higher education sector and Tk. 7,454 crore in FY 2019-20 for technical and madrasa education. Earlier on Saturday, Parliament passed the Finance Bill 2019 with some changes in the proposals over the capital market, VAT and handloom industry, and scrapping the opportunity to invest black money to buy land. The proposal for legalizing undisclosed money through investing in land was proposed in the Finance Bill 2019, placed in parliament on June 13. Parliament also reduced tax on retained earnings and reserves of companies to 10 percent from initially-proposed 15 percent in the face of outcry from businesses, who argued that the step would discourage business expansion and investment. It also passed the proposal to cut tax on stock dividend to 10 percent. The government initially proposed to impose 15 percent tax on stock dividend to encourage listed companies to pay cash dividend to protect interest of small investors. Listed companies will have to pay cash dividend equal to the ratio of stock dividend. If the ratio of stock dividend is higher than the cash dividend, the company will have to pay 10 percent tax on stock dividend. The House also passed the proposal that listed companies would give 30 percent of its net profit as stock and cash dividend. If any company fails to do so, it will have to pay 10 percent tax on retained earnings and reserves. In the budget proposal, the government sought to slap 15 percent tax on the retained earnings and reserves of a company if the amount exceeds 50 percent of the paid-up capital. It also said stock dividend by listed companies will be subject to 15 percent tax. Parliament also passed a proposal to impose specific tax at Tk 4 on each kilogram of yarns used by weavers instead of previously proposed 5 percent VAT. Source: UNB AH

Finance Minister Abul Maal Abdul Muhith said, apart from gas and coal based power plant, the first phase work of 2 thousand 4 hundred megawatt capacity Rooppur Nuclear Power Plant with assistance from Russia is going to be implemented at the end of this fiscal year. The Finance Minister delivered the information while delivering the budget speech of 2018-19 fiscal year in the parliament on Thursday. In his speech he proposed budget of 24 thousand 921 crore taka for the power, energy and mineral resources division for the fiscal year 2018-19. During the speech he said, we have supplied electricity to 92 percent areas of the country and 90 percent families get the connection. Keeping ahead the slogan ‘Initiative of Sheikh Hasina is electricity to every house’ we want to expand the circumference of electric connection. The size of this year’s budget is nearly 4.75 lakh crore taka. The sum of the budget is slightly 20 percent more than the Gross Domestic Product-GDP. In the budget the development expenditure is fixed at 1 lakh 80 thousand 869 crore taka including ADP of 1 lakh 73 thousand crore taka. The rest 2 lakh 87 thousand 131 crore taka will go to the non development sector like meeting wages and interest. AH