Bangladesh: Renewed focus on growth in industry-friendly Budget

Bangladesh’s government has taken up a strategy in the Budget to speed up development in various sectors of the economy. The country's Finance Minister A.H.M. Mustafa Kamal presented the Budget today for FY2022-23. It was revealed that even during the Covid-19 pandemic, the GDP growth in FY2020-2021 was 6.94%.

The Budget has taken several steps to encourage production of those goods in the country that can be produced domestically to discourage imports.

Changes in tax structure:

• Galvanized iron sheet or steel products are one of the major raw materials used in construction of infrastructure and are also being used in the Ashrayan Project of the government. In this context, the Budget proposed to reduce the rate of tax from 5% to 3% on imported HR coils and zinc, raw materials used for manufacturing galvanized iron sheets or steel products.
  
  
• In order to encourage production of import substitutes in electrodes and wire drawing, the government has proposed to reduce the duty to 5% on imports of bars and rods of alloy steel used as a raw materials.
  
  
• At present, some local industries are producing high-quality stainless-steel products. In order to encourage the establishment of local backward linkages in heavy industry and to ensure market competitiveness, the Budget proposed to reduce the existing import duty from 10% to 5% on hot rolled stainless steel sheets as raw material.
  
  
• Wires, rods, tubes, plates, electrodes and similar products are subject to different import duty rates. In order to harmonize the duty rates on such products, it has been proposed to increase the existing import duty on such products from 10% to 15%.
  
  
• VAT exemption has been proposed on supply of locally procured scrap in the foundry industry.
  
  
  

Project updates

• Implementation of a large number of mega-projects is currently underway in the country. The Padma Bridge, Metro Rail, Karnafuli Tunnel, and elevated expressway from Dhaka Airport to Kutubkhali near Jatrabari will be opened soon. Completion of several other major projects, including Payra Seaport, Matarbari Deep Seaport, Rampal Power Station will add a new dimension to the progress of the country.
  
  
• At present, 34 power plants with a capacity of 13,530 MW are under construction. Considering the availability of land, energy transportation facilities and load centres, mega projects are being implemented at Payra, Maheshkhali and Matarbari, in a bid to transform the region into a power hub.
  
  
• At present, 26 projects under the Road Transport and Highways Division are being implemented. The government has adopted a time-bound action plan to build an integrated metro rail system of 129.901 km (68.729-km elevated and 61.172 km underground).