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Macroeconomy and Global Perspective
Mr. Speaker
9. Before I present the budget proposals, I would like to focus briefly on the global and internal economic contexts on which the budget for FY 2012-13 has been prepared. Here, in the 4th table appended to the budget speech, I have presented the trend of selected indicators over the last three years.
Global Perspective
10. As you know, FY 2008-09 was the year of global recession when we formed our Government. To confront the recession, we successively declared two stimulus packages. As a result, we could keep the negative impact of that recession on the economy of Bangladesh at a minimum level. During this period, the average global growth plummeted (-0.6 percent), export declined (-11 percent) and remittance went down (-6.3 percent). Against this backdrop, our growth remained stable (5.7 percent), export grew (10.3 percent) and remittance went up (22.4 percent).
11. In next couple of years following the recession, global output increased, export and remittance surged. However, in 2012, it was observed that the speed of global recovery was, in reality, less than expected. Although the US economy rebounded to some extent, the growth slowed down due to sovereign debt crisis in the EU countries and the escalating geo-political risk . On the other hand, the growth performance of emerging and developing economies was also low because of slow rate of global growth and restrained monetary policies In coming years, the dynamics of growth will largely depend on the duration of the second spell of recession and fluctuations of fuel price.
Growth
12. According to the latest forecast, the growth of global economy may stand at 3.5 percent in 2012. The developing and emerging economies might grow at 5.7 percent. In pace with the economies of other emerging and developing countries, we have been able to sustain the economic growth in Bangladesh. In FY 2010-11, we achieved a growth rate of 6.7 percent and as per the provisional estimates of BBS, in FY2011-12 the growth will be 6.3 percent. In my opinion, in this estimate BBS did not factor in a number of aspects namely, bumper Boro harvest, surge in internal demand from the month of April, our remarkable achievement in power generation and improved ADP implementation. For all these reasons, I am confident that by the end of this month - the closing month of current fiscal year, our GDP growth will stand in the neighbourhood of 7 percent. We have set our growth target at 7.2 percent for FY2012-13 on the basis of our expectations that a satisfactory growth in trade and agriculture sectors will continue as the global economy turns around by 2013, there will be a consistent credit flow to the development sectors and, above all, deficits in power, energy and infrastructure will decrease gradually.
External Sector
13. In the last three years, we had an export growth of 21.2 percent. In the current fiscal year, up to April 2012, the export growth is 8.4 percent compared to that of the corresponding period of the previous fiscal. The global demand for our exports went down due to low growth in major overseas markets, especially, EU countries. However, we kept on expanding regional trade in tandem with product and market diversification. This will help us in sustaining the export growth in coming years. Besides export, our import increased by 22.2 percent on an average in the last three years. In the current fiscal year, up to April 2012, import grew by 8.7 percent. Although import growth of capital machinery and industrial raw materials decreased during this period, there was an overall growth in those items in the last three years. During this period, import of capital machinery increased by 20.7 percent and that of industrial raw materials increased by 19.8 percent. Side by side, during this period, we had to increase import of petroleum products to keep it consistent with our development strategies.
Remittance and Manpower Export
14. Remittance grew by 9.8 percent on an average in the last three years. This growth momentum is continuing in current year as well registering 10.4 percent growth during July-April period of the current fiscal year. Up to April this year, manpower export standard stands at 5.66 lakh. In order to increase manpower export and remittance inflow, we are persistent in our efforts to enhance the skill base of our labour force. We are continuing our diplomatic efforts to find new labour markets.
Current Account
15. In the first half of the current fiscal year, we observed that foreign currency reserve is depleting and the exchange rate of Taka going down. Immediately, we adopted somewhat restrained monetary and fiscal policies. This yielded result and there is a current account surplus of US$ 455 million up to March of the current fiscal.
Foreign Exchange Reserve and Exchange Rate
16. The exchange rate of Taka against dollar is settling down. On 29 May, 2012 the rate stood at Tk. 81.9. Our foreign exchange reserve stands at US$ 9.5 billion which is sufficient to foot three month's import bills.
Inflation
17. The rate of food inflation has decreased since the second quarter of the current fiscal. However, non-food inflation remains at double digits level. After a long time, by the end of April 2012, general inflation came down to single digit level, i.e., 9.9 percent on point to point basis and food inflation to 8.1 percent. We took measures to keep the supply and distribution channels for daily necessities uninterrupted, monitor market on a regular basis and increase productivity in agriculture. As a result, we see a satisfactory and sustained growth in agriculture. This year we have had a bumper 'Boro' production. The food stock is also at a comfortable level. In addition, by observing austerity in public spending and generating more revenues, we have been successful in keeping budget deficit at a tolerable level. I am hopeful that, as a combined effect of these steps, the inflation situation will ease up further in coming days.
Monetary Policy
18. We are pursuing a restrained monetary policy to manage aggregate demand. Up to March 2012, the growth of money supply, on year on year basis, stood at 17.6 percent. Private sector credit flow grew by 19.4 percent. We intensified our supervision over the activities of banks to ensure that credits are channeled to the productive sectors; especially to see that industrial term loans and SME loans are used meeting the principles of propriety. Our efforts to control the flow of credits to non-productive sectors are continuing. I hope these steps will create a positive effect in containing inflation.
Chapter III
Budget for FY2011-12: Problems and Corrections
19. Here, I would like to briefly dwell upon the state of economy and on the revised budget of the current fiscal year i.e. FY2011-12. The fiscal situation in FY2009-10 and 2010-11 was broadly stable. Budget deficit was within the tolerable limit. Revenue income increased during this period. We could increase the size of ADP and also the rate of ADP utilisation. I have already tabled two quarterly reports before this august House on current year's fiscal situation. In my second quarterly report, I highlighted the probable revised budget framework for FY2011-12. However, it was done at a point of time in the fiscal year, when the activities of the ministries/divisions/departments were generally gathering pace. I, therefore, expressed my expectations that the picture of income and expenditure would be brighter in the remaining months of the fiscal year. As a sequel to that, I am now presenting a brief account of the proposed revised budget for FY2011-12:
Revised Revenue Targets
† In the budget for FY2011-12, the target for revenue income was set at Tk. 1,18,385 crore (13.2 percent of GDP). In the revised budget, the target for NBR revenue has been enhanced by Tk. 500 crore while the target for non-NBR revenue collection has been kept unchanged. The revised target for non-tax revenue has been set at Tk. 18,600 crore after slashing down the original target by Tk. 4,000 crore following a decision of the Government to stagger 2G license fee to 3 years from its current duration of 2 years. Consequently, the revised target for total revenue collection stood at Tk. 1,14,885 crore (12.6 percent of GDP). We are hopeful that the current fiscal year's revenue collection will surpass last year's actual collection (almost 0.8 percent of GDP).
Revised Expenditure Targets
† The total public expenditure was estimated at Tk. 1,63,589 crore in the current fiscal year's budget (18.2 percent of GDP). It has now decreased to Tk. 1,61,213 crore (17.6 percent of GDP) after a reduction of Tk. 2,376 crore in the revised budget. In the case of ADP, the allocation has been decreased to Tk. 41,080 crore due to the fact that the utilisation of project aid did not meet the expectation. On the other hand, an amount of Tk. 20,477 crore was allocated in the original budget for subsidy in agriculture, power and energy sectors. In the revised budget, this allocation has been increased to Tk. 30,154 crore after an additional allocation of Tk. 9,677 crore. This additional resource has been provided by reappropriating allocations made against PPP initiatives, investment in shares and equities and by slashing down discretionary expenditure.
Budget Deficit
† In the original budget, deficit was estimated at 5.0 percent of GDP. It will now stand at 5.1 percent of GDP with a slight increase from the original budget. Out of this 1.3 percent of GDP will be financed from external sources and the rest 3.8 percent from domestic sources. Again out of this 3.8 percent, 3.2 percent will be financed by borrowing from banking system. In order to maintain overall economic stability, we need to take measures to reduce our dependence on banking sector in financing budget deficit. In doing so, we have enhanced the rate of interest on savings instruments and simplified the investment conditionalities.
Revised ADP
† In my three previous budget speeches, I mentioned that successful implementation of ADP is a big challenge for us. In this regard, the Planning Commission is closely monitoring the progress of project implementation of large 10 ministries. To address the issue, I personally met with all the ministries/divisions on three occasions. We are emphasizing on extensive coordination among ERD, Ministry of Planning, project executing line ministries and development partners. In tandem, we are attaching much importance to the implementation, monitoring and evaluation of foreign aided projects having large allocations. ADP implementation capacity has largely enhanced. While in FY2008-09 actual ADP spending was Tk. 19,438 crore (3.16 percent of GDP), in the current fiscal year it has grown into Tk. 41,080 crore which is 4.49 percent of GDP.

Development of edn, health, physical infrastructure, SME sectors stressed

Mr. Speaker
Recent Economic Scenario
20. Over the last two years, the price of fertilizer and food in international market has been increasing along with the rise in fuel price. The adverse impact of such price hike on an import-dependent country like ours is quite obvious. I, therefore, cautioned in my last budget speech that we may have to take some hard decisions in tackling the challenges arising from increasing fuel price. I pointed out that we might have to augment revenue income while reducing expenditure on less important items including subsidies. There might even be a need to observe austerity. Moreover, money supply might have to be tightened and exchange rates readjusted. In the first half of current fiscal, we saw a record rise in public expenditure. It was mainly due to the subsidy liabilities of agriculture, energy and power sectors. As an immediate reaction to this situation, government borrowing from the banking system surged with resultant rise in interest rates. This further led to the decline in private sector credit flow to some extent. It also created pressures on foreign currency reserves and made exchange rate unstable. We instantly went for a restrained monetary and fiscal regime. Our priorities were realigned and expenditure rationalised. As a result, since the beginning of the latter half of the year, the momentum in the macroeconomy was restored. I hope we will be able to sustain the economic stability and the growth dynamics in the coming days.
21. Here, I would like to draw your attention to the fact that in theory, investment declines and industrialistion slows down with the rise in interest rates. In the current fiscal, interest rates were pushed a bit upward due to monetary policy tightening and increased government borrowing from the banking system. The Government, therefore, has adopted a policy to keep its bank borrowing to a minimum in the next fiscal year. We, however, believe that generally interest rates should be left to be decided by the market forces so that optimum allocation of resources is ensured. Empirical research reveals that investment-interest rate correlation is not very much significant. When an economy is in the take off stage, there are ample opportunities for earning high returns on investments. As a result, high interest rates are not likely to impede investment.
Economic Strategies
22. Our subsidy payment is going up due to lack of sufficient price adjustment to match the upward trend of fuel price in the international market. This is intensifying pressure on financial sectors, on government budget and on the macro-economy. In this situation, we have to reduce subsidy, especially fuel subsidy. We have to put a tight rein on expenditure against non-productive sectors as well. Revenue income has to be augmented. Credit flow to non-productive sectors has to be controlled. We have to keep pursuing restrained monetary policy. At the same time, we have to ensure that growth is not adversely affected or private sector investment is not hampered. To that end, we have to create enough fiscal and monetary space. The rate of utilisation of foreign aid has to be increased. We have to find ways on how to get the foreign aid commitments released and quickly utilise the same. The Non Resident Bangladeshis are to be encouraged to invest in Bangladesh. If needed, sovereign bonds may be issued and resources so gathered can be used only on big projects having national priority. Its worth noting that the size of the budget in the normal process will grow each year together with a growth of non-development expenditure. When a nation creates assets, it is essential to operate and maintain them to get return consistently. All expenses incurred for the operation and maintenance of those assets are borne on the nondevelopment budget. As we all know that failure on these two counts often leads to lower utilisation of economy's capacity which eventually may harm the national development.
Chapter IV
FY2012-13 Budget Structure
Assumptions
Mr. Speaker
Global Economy
23. Now I would like to reflect briefly on the overall budget structure of FY 2012-13. The next fiscal year's budget has been prepared based on a number of assumptions under the Medium Term Macroeconomic Framework. The building blocks of this framework are - continuity in pursuing monetary and fiscal policy strategies and ensuring macroeconomic stability. It is assumed that in 2013, world economy will recover from the economic recession that re-emerged especially in Europe in 2012. As a result, world economic growth will gather pace raising the demand for Bangladeshi exports. In the 5th table appended to the speech, a matrix on budget structure while in the 6th and 7th tables data on the overall budget and sector wise ADP allocations have been presented.
Fiscal and Monetary Space
24. With the Extended Credit Facility (ECF) with IMF being effective, the development partners and potential investors will be more confident about Bangladesh. Due to this, we are expecting a rise in Foreign Direct Investment (FDI). It will also make the disbursement of foreign aid in the pipeline easier and increase project aid utilisation rate. Thus, implementation of Annual Development Programme (ADP) will gather momentum. In order to make the saving instruments (Sanchaypatra) attractive to the public, we have harmonised its interest rate with other existing rates prevailing in the market. Moreover, we have taken steps to repackage and rebrand the conventional diaspora bonds and adopted appropriate market promotion policies. As a result, financing from the saving instruments and bonds will increase in the proposed budget. At the same time, this will not crowd out the private sector. The resulting fiscal and monetary space will be supportive in implementing development programmes of the Government. This will accelerate private sector investment. In this backdrop, the GDP growth target for FY2012-13 has been set at 7.2 percent. GDP growth rate will increase to 8 percent by FY2014-15.
Sustained Growth in Agriculture
25. The agriculture sector will help continue our growth trend. Production of flood-draught -salinity  resistant seeds, targeting of government assistance in the sector, provision of uninterrupted power supply for irrigation, and increased flow of agricultural credit will continue. These will result in enhanced agricultural productivity, crop intensity and its diversification.
Private Sector Investment
26. At the moment, the main impediment to investment consists of infrastructural deficit and lack of good governance. We have laid emphasis on infrastructural development. We are effectively pursuing the agenda of expanding the coverage of electrification rapidly. We are also exploring ways for ensuring optimum energy diversification. We are continuing our endeavors for extension and development of railways, roads, waterways together with land ports, sea ports and airports. PPP framework has been established. We are making rapid progress in terms of digitizing Bangladesh and at the same time taking steps to reduce the cost of doing business. Hopefully, these steps will crowd in private investment. Many expressed concerns about the state of investment in private sector which are not founded on facts. In the previous fiscal year, private sector credit growth was enormous i.e. 26 percent. Compared to that, it is projected to be only 16 percent this year. The private sector credit stood at Tk. 3,40,713 crore by June, 2011, while in the current fiscal year it is projected to be Tk. 3,95,227 crore.
Revenue Mobilisation
27. The ongoing legal, procedural and structural reforms in revenue sector will continue. Alternative Dispute Resolution (ADR) system introduced in the current fiscal will play a significant role in scaling up revenue collection. As a result of re-fixation of the rates of non-NBR tax and Non-Tax Revenue, revenue collection will be further augmented.
Inflation
28. The budget has been proposed on the assumption that the prices of fuel will be automatically adjusted in harmony with international prices along with planned adjustment of power tariff. Initially, non-food inflation may remain high due to higher fuel prices and lagged effect of food inflation. However, monetary tightening initiatives along with fiscal consolidation will continue. Because of the outlook of declining trend in food prices in international market and satisfactory domestic agricultural production, we are expecting the food prices to settle at a tolerable level. The increased supply of foreign exchange will keep the exchange rate stable. As a result, inflation will moderate. Given this scenario, we are expecting to bring down inflation to 7.5 percent in the next fiscal year and to 5.0 percent in the medium term.
Structure
Mr. Speaker
Now, I will briefly present the proposed income and expenditure estimates for FY2012-13.
Estimates of Revenue Income
29. The revenue income for FY 2012-13 has been estimated at Tk.1,39,670 crore which is 13.4 percent of GDP, of which NBR tax revenue is Tk. 1,12,259 crore (10.8 percent of GDP). Revenue from non-NBR sources has been estimated at Tk.4,565 crore (0.4 percent of GDP). Tk.22,846 crore (2.2 percent of GDP) will be collected as Non Tax Revenue (NTR).
Estimates of Expenditure
30. The total expenditure for FY 2012-13 has been estimated at Tk.1,91,738 crore (18.1 percent of GDP). The allocation for non-development and other expenditure is Tk.1,36,738 crore (13.1 percent of GDP). Expenditure for ADP has been estimated at Tk.55,000 crore (5.3 percent of GDP).
Budget Deficit & Financing
31. The overall budget deficit will be Tk.52,068 crore which is 5.0 percent of GDP. Of this amount Tk. 18,584 crore (1.8 percent of GDP) will be financed from external sources and Tk.33,484 crore (3.2 percent of GDP) will be financed from domestic sources. Of the domestic financing, Tk.23,000 crore (2.2 percent of GDP) will come from the banking sources and Tk.10,484 crore (1.0 percent of GDP) will come from non-bank sources. For the purpose of financing the deficit we are placing emphasis on mobilising the concessional loans from external sources as before.
Annual Development Programme
32. Like the previous three budgets, without catering to the needs of any particular region, we have determined the size of ADP by factoring in the issues of regional parity, improved infrastructure and quality of expenditure as outlined in our election manifesto. In the ADP, 25.5 percent, 29.9 percent, 17.3 percent and 14.8 percent of total allocation have been proposed for human resource sector (education, health, and other related sectors ), agriculture sector (agriculture, rural development and rural institutions, water resources), power and energy sector and communication sector (road, railway, bridges and other related sectors) respectively.
Overall Expenditure Structure
33. I have already presented the allocation structure of ADP for FY2012-13. Now, I would like to focus on the overall expenditure (development and non-development) structure of the proposed budget in this august House which will give an idea about the sectoral allocation and priorities of the overall budget. We may classify different ministries/divisions into three groups based on their functions - social infrastructure, physical infrastructure and general services sectors. In the proposed budget 24.2 percent of total outlay has been allocated to social infrastructure sector of which 20.5 percent has been proposed for human resource (education, health, and other related sectors) sector. 27.8 percent of total allocation has been proposed for physical infrastructure sector of which 14.9 percent has been proposed for overall agriculture and rural development, 7.0 percent for communication sector, 5.0 percent for power and energy sectors. 19.3 percent of total allocation has been proposed for general services sector. 4.9 percent of total allocation has been proposed for Public-Private Partnership (PPP), financial assistance for different industries, subsidy, and equity investment in nationalised banks and financial institutions. 12.2 percent has been proposed as interest payments. Rest 11.7 percent will be spent for net lending and other expenditures. I hope that the proposed budget in the context of domestic and external environment will support growth , contain inflation and reflect aspirations of the general people.
Chapter V
Reform Programmes
Public Financial Management
Mr. Speaker
34. Our resources are limited. We, therefore, need to ensure optimum use of the limited resources. In order to ensure enhanced transparency and accountability in public financial management, we are committed to take forward the ongoing reform initiatives. Reform is a continuous process and without reform existing stalemate in the traditional system can not be dismantled for improvement. Now, I will briefly discuss our achievements and future plans in this area.
Medium Term Budget Framework
35. As part of reforming the budget preparation process, we have already brought all ministries/divisions including all constitutional bodies under the Medium Term Budget Framework. Thus, we have put in place a system to ensure resource allocation in line with Government policies and priorities and undertake performance assessment of the Government offices/organisations. Currently, we are working on deepening this process. To fulfill this objective, creation of budget management wings/branches in all the ministries/divisions will be completed by this fiscal end.
Multi-module Database (iBAS)
36. Alongside enhancing institutional capacity, we are continuously working to improve technical capacity of government agencies. All ministries/divisions are now preparing budget using computer based multi-module database (iBAS). We have plans to extend this network to different directorates/agencies and district/upazaila offices. Gradually, multi-module database will be used not only in case of budget preparation but also in case of budget implementation and monitoring including revenue collection and fund release in future.
Reforms in Expenditure Management
37. There is no alternative to sound expenditure management to achieve targeted outputs. To this end, we are continuing with our efforts on expenditure management reforms. We have taken steps to strengthen economic management by building appropriate macroeconomic model and database. Steps have also been taken to develop Government's Debt Management and Financial Analysis System. We have taken steps to prepare Annual Cash Plan consistent with our borrowing requirements. In addition, steps have been taken to create a database to enhance transparency in the management of public shares and equities. As per our commitment, we have started mapping of economic codes as a step towards unification of development and non-development budgets. These initiatives are expected to protect us from internal and external economic shocks.
ADP implementation
38. Two committees have been formed to recommend the ways and means of mitigating delays and difficulties in project approval process. Hopefully, from September next, the implementation of recommendations of these committees would be started. In this respect, we have our shortcomings as well. We have not yet been able to formulate the policies required for simplification of the processes of formulation, processing, implementation and evaluation of development projects. Our efforts, however, are continuing.
New Budget Classification Structure and District Budget
39. In the previous budget speech, I mentioned about revising the existing budget classification structure to make it more consistent with international practices. We have already prepared a draft classification structure which is now under scrutiny. I hope to finalise this structure by the next fiscal year. On its finalization, the technical difficulties faced in the preparation of district budget, which we have earlier promised to prepare, will be largely removed.
Information Technology in the Public Financial Management
40. Recently, we have introduced 'Electronic Fund Transfer' (EFT) in three ministries on pilot basis. Under this system, after directly transferring money to his account, the beneficiary is informed about the transfer through cell phone and internet. There is a plan to extend this facility to all the ministries by next year and successively to district level. The digitization process of treasury challan will be completed in the next fiscal year. We have also initiated the development of a central employee database covering data on salary, pension, payroll and other relevant information for all the officers/staff of the republic. We are contemplating to create a pension fund in the next fiscal year.
Strengthening Audit
41. A draft Audit act has been prepared as promised. After required scrutiny, I hope to table the bill in the parliament next fiscal year. Performance audit has been undertaken in 5 ministries. Hopefully, the reports will be issued within this year. Gradually, this activity will be expanded.
Ensuring Private Participation in the Infrastructure Sector
Mr. Speaker
Public-Private Partnership
42. In my first budget speech, I mentioned about PPP initiatives to meet investment deficit in infrastructural developments and maintenance. In order to ensure Government participation and create a transparent and strong PPP framework, we have established a PPP office as a separate entity. This office has started functioning with full financial and functional autonomy. Given the complexities inherent in contractual framework of PPP, capacity building of the officials of the ministries/division is underway. A law has been drafted consistent with the guidelines prepared for policies, strategies and selection and approval processes of projects under PPP.
Institutional Framework
43. As part of the PPP initiatives in FY2009-10, we created technical assistance fund, Viability Gap Fund (VGF) and infrastructure investment fund. We have finalised the policy guidelines on technical assistance and VGF. In the Finance Division, a full-fledged PPP unit has been established. This unit will put in place a PPP manual by this month. An investment fund called Bangladesh Infrastructure Finance Fund Limited (BIFFL) has been established.
Progress of PPP Projects and Future Plans
44. Although the number of PPP projects is not as expected, a considerable number of such projects have been approved. I am hopeful these projects will be implemented soon. A number of PPP projects on power plants, land ports and other infrastructures have been successfully implemented. Eight projects under five ministries/divisions to be implemented on pilot basis have been identified. According to a preliminary estimate, probable investment in these projects will be around Tk. 3,000 crore.
Financial Sector
Mr. Speaker
Sovereign Credit Rating
45. International credit rating agencies Moody's and Standard and Poor's have reviewed and retained the credit rating position of Bangladesh. This indeed is a great success in the context of recent downgrading of credit ratings of many developed countries. This speaks of our financial discipline and sound macroeconomic management. This credit rating will facilitate enhanced external investment and trade.
Modernisation of Bangladesh Bank
46. We have undertaken a number of reform initiatives to establish an efficient financial sector. By installing LAN and WAN across all the divisions/offices, Bangladesh Bank, in its entirety, has been brought under a web-based internet connectivity. ERP (Enterprise Resource Planning) software has been installed to carry out accounting as well as human resource management activities effectively. A long term plan has been adopted to install Enterprise Data Warehouse and National Switch keeping in sight the wider target of implementing e-Commerce.
Reforms in Financial Sector
47. In FY2010-11, I made a commitment to establish one 'Probasi Bank' (Expatriate Welfare Bank) under private ownership. Meanwhile, approval has been accorded to establish three 'Probasi Banks' under private ownership. Besides, we have already prepared a draft amendment to the Bank Company Act 1991. A special committee has been formed to scrutinise the draft. The draft is expected to be finalized by next financial year.
Anti-Money Laundering
48. I expressed our commitment to prevent money-laundering and financing for terrorism in the previous budget speech. By this time Anti-Money Laundering Act, 2012 and Anti-Terrorism (Revised) Act, 2012 have been formulated. This will facilitate exchange of information on money laundering and also strengthen activities related to the recovery of laundered money. At the same time, this will enhance the image of Bangladesh in the international arena. Of late, the Banking and Financial Institutions Division has published a detailed report on this subject. This report has been presented with the budget documents.
Mr. Speaker
Reforms in Insurance Sector
49. The role of a strong insurance sector is vital for the economic activities of the country as well as for the expansion of trade and commerce and related risk mitigation. I mentioned in my previous budget speech about the establishment of an Insurance Development and Regulatory Authority (IDRA) to ensure legal and structural reforms in the insurance sector. This authority has finalized six regulations and working on five more with a view to establishing discipline in the insurance industry. These rules and regulations, if applied properly, will protect the interests of the insurance policy holders on the one hand and bring dynamism in the insurance industry on the other.
Capital Market
Mr. Speaker
50. Undoubtedly, the role of capital market is important for capital formation, industrialization and employment generation. Despite worldwide economic slowdown, our capital market remained buoyant. Later on, this buoyancy could not be sustained. It is sad but true that during the last one year the market went through massive correction in market capitalization and index. We took different initiatives to rectify the situation. This has created an environment which will restore stability in the stock market. At the same time, we have taken an initiative to restore investors' confidence and declared several incentive packages for the capital market.
Capital Market Restructuring
51. The face value of a share of all listed companies and mutual funds of two stock exchanges has been reset at Tk. 10. It has been made mandatory for the sponsor-directors of a company to hold individually at least 2 percent and collectively 30 percent of share of the paid up capital. The old legal provisions on book-building procedure, mutual fund and paid up capital have been updated. We have taken an initiative to amend the relevant laws to make the activities of Securities and Exchange Commission transparent and accountable. However, in my opinion special reform interventions are needed to address instability in the capital market and to prevent its unwarranted volatility. To this end, we will introduce demutualization programme in the stock exchanges by the next fiscal year. It will bring transparency in the functions of the stock exchanges and the market system.
Surveillance and Clearing & Settlement System
52. In order to ensure transparency and accountability in the transactions of the capital market, the monitoring system has been strengthened with the introduction of modern surveillance system. In parallel, a separate Clearing and Settlement Company is going to be established to facilitate disposal of stock exchange transactions within the shortest possible time. In future, we shall also take up initiative to establish a special court for the disposal of capital market related cases.
Financial Reporting Act and Council
53. In my previous budget speech, I mentioned about the importance of Financial Reporting Act for establishing stability in the capital market. It is by no means possible to prevent over valuation or under valuation of stock markets unless the accounts of the business entities are transparent and reliable. By now, a draft of this act has been prepared. After necessary scrutiny, I hope to present the Act in the Parliament for approval next fiscal year.
Business Environment
Mr. Speaker
Reducing Cost of Doing Business
54. Now, let me inform you about the progress so far made in bringing about three basic changes to the business process through seven steps that I mentioned in my previous budget speech to be undertaken to reduce the cost of doing business. In order to assist the new entrepreneurs, initial preparations for automation of land registration process have been completed. As a first step towards digital land management, the digitization of all land related information of 62 districts excluding the hill tract districts have commenced. An initiative has been taken to establish One Stop Service Centre at RAJUK. At the same time, we are working for digitalization of all land deeds. Hopefully, on completion of this activity by April 2013, the time taken for issuance of registered deeds will come down from 7 days to 2 days. Side by side, we are working to complete installation of a trade portal as promised by 2013. In order to minimize business related complications, a data centre have been established in the Supreme Court with 5 dedicated benches in the High Court Division to hear and dispose off the cases arising from tax, money and labour related disputes. To move in tandem with modern international trade practices, work is in progress to procure ASYCUDA-World for automated estimation of duties and levies for advance declaration and cargo clearance and to deposit treasury chalans online or through mobile phones instead of using the paper based ones.
Regional Trade
55. We have adopted a liberal policy in conducting our foreign trade. Following this policy, we have signed different regional and bilateral trade accords recently. As a result, the SAFTA (South Asian Free Trade Agreement) member countries have largely reduced their sensitive lists. India has allowed duty free access to all goods except 25 for the SAARC's Least Developing Countries (LDC). Under the SAARC Agreement on Trade in Services (SATIS), the member countries have exchanged primary 'offer list' and 'request list'. Further, the member countries of Asia-Pacific Trade Agreement (APTA) including Bangladesh have signed a framework agreement. We have also established border haats (Shimanto haat) with India. The size/scope and number of these border haats will be increased gradually. We will soon finalise the forthcoming import and export policies.
Ensuring Fair Competition and Transparency
56. Fair competition is essential for trade. In my previous budget speech, I pledged to formulate 'Competition Act'. Meanwhile, the draft bill has been placed before the Parliament. A Competition Commission will be formed once the bill is passed. As a result, it will be easier to prevent illegal practices in competition. We have begun the process of bringing the multi level marketing companies and societies under a legal framework and making their activities transparent as well.
Economic Zones
57. Seven sites have been primarily selected for establishing economic zones under the 'Bangladesh Economic Zones Act 2010'. I am confident that we shall soon move much ahead of the competing countries with respect to expansion of trade. As part of the implementation process, we have made the legal framework on the trade bodies time-befitting. In these zones, the private sector will play the dominant role. The zone planning, communication system, infrastructural development and land acquisition will be done by the government. However, the entrepreneurs will have to ensure other arrangements needed for establishing an economic zone.
Chapter VI
Some Key Sectors
Mr. Speaker
58. Now, I would like to present before this august House the achievements of our government in various sectors in the last three years, sector wise plans for the coming year, future plans and sector wise budget allocations in order to implement those plans.
(I) Power and Energy Sector
Power
Mr. Speaker
59. Power is the main driving force of our socio-economic development and poverty reduction efforts. From the very beginning, we underscored the importance of this sector and accordingly attached highest priority to power and energy sector in our election manifesto. We laid emphasis on a comprehensive action plan. By now, we have prepared the Power Sector Master Plan (PSMP) 2010. We kicked-off our implementation agenda by installing new power plants, upgrading transmission and distribution system, diversifying renewable energy sources and identifying ways to ensure economic use of power. Despite all these efforts, due to load-shedding, people in Dhaka and elsewhere has been suffering a great deal. A question, then, might be asked; what is the result of all these initiatives? In response, I would like to submit that some of the development activities have lagged effect and their impact only become visible after a certain period. I am confident that the results of all our endeavors will become visible to the nation by 2013.
Power Generation Situation
60. When we formed our government in 2009, the demand for electricity was 5,600 MW against which 3,525 MW of electricity could be generated. At that time, we had at our disposal a total of 33 power  plants under both public and private sectors. We had 8,305 km transmission lines, 103 sub-centers and 2,56,143 km distribution lines. The demand for electricity in the country now stands at 7,518 MW and we are producing 6,066 MW. Now, we have got as many as 79 power plants under both public and private sectors. However, because of accelerated demand, power shortage is being strongly felt.
61. According to our commitment made in the budget for FY2009-10, we have laid an additional 523 km of transmission line and 22,857 km of new distribution line and set up 10 new sub-stations till April, 2012. A total of 1.30 crore subscribers have been brought under new connectivity network in the last three years. The percentage of population under the coverage of electricity supply has been raised from 47 percent to 53 percent. We have been able to add 3,300 MW of additional electricity to our national grid from January, 2009 to April, 2012. You will agree with me that the power situation as of now in the country is much better than any other time in the past.

Finance Minister AMA Muhith and Prime Minister Sheikh Hasina giving approval to the National Budget 2012-13 after a meeting of the Cabinet at Jatiya Sangsad in the city Thursday — PID photo

Power Generation Plan
62. In my budget speech for FY2009-10, I had mentioned that we will produce additional 5,000 MW of electricity by 2013. By this time, the demand for electricity has gone up substantially. The per capita electricity consumption rate has increased from 220 kwh to 265 kwh. We have, therefore, planned to produce 8,294 MW of electricity by 2013 in addition to our previous target. Agreements have been signed to install 52 power plants both under public and private sectors to achieve this goal. We are expecting that these plants will go into commercial production by FY2013-14. Moreover, installation of 30 power plants having capacity to produce 5,600 MW of electricity is in progress. These new power plants will come into operation by 2015-16.
Alternative Sources
63. We will be able to generate 700-800 MW of additional electricity by undertaking BMRE of old gas fired power plants by February 2015. In the context of growing demand for power, 250 MW of electricity will be imported from India by 2013. In addition to this, import of electricity from Myanmar, Nepal, and Bhutan is under way. Moreover, steps have been taken to construct coal based power plants with a capacity of 2,938 MW of electricity under joint venture investment by 2016. We also have taken initiatives to produce 5,000 MW of electricity from nuclear energy by 2030. . Besides, we have kept unhindered the process of diversifying energy sources. Thus far, 70 MW of electricity has been produced from renewable energy sources under public and private sectors. We have a plan to produce 500 MW of electricity from renewable energy sources by 2020. We hope that by adopting various energy savings measures we will be able to save 350 MW of electricity by 2013. Alongside, power distribution agencies have installed 56,415 prepaid meters to ensure receipt of cent percent revenue. Another 35,000 prepaid meters will be installed in near future.
Energy
64. I am placing today a second update of the report on 'Road Map towards Development of Power and Energy Sector' before this august House. This report will provide a complete picture of our achievements in power and energy sector, existing problems and our action plans to address them.
Energy Production
65. As natural gas is environment-friendly and less expensive, its demand has been increasing gradually. As an outcome of various actions taken to increase extraction of natural gas over the last three years, it has been possible to extract additional 405 mncft of natural gas daily. At the same time, the extractable reserve of gas has increased from 20.6 tcf to 26.8 tcf. 365 mncft has been supplied to the national grid through connecting pipelines. We have a plan to add 1,285 mncft of natural gas to the national grid by 2013. Now, we are producing 2,100 mncft of natural gas from 24 gas fields. Approximately, 7.00 lakh MT of coal are now being extracted from Barapukuria Coal mine annually for use at the Barapukuria Thermal Power Plant. I am hopeful that we will be able to complete the task of upgrading the capacity of the Eastern Refinery threefold by December 2013 as promised in my last budget speech.
Offshore Exploration of Oil and Gas
66. Despite little progress in importing LNG and formulating laws and policies on coal extraction and import, our remarkable success in the energy sector has been the achievement of winning international legal recognition of our rights and sovereignty over the 200 nautical miles exclusive economic zone and the adjacent continental shelf in the Bay of Bengal. This recognition has opened up for us a door of immense potential for exploration of oil and gas within the maritime boundary.
Onshore Exploration of Oil and Gas
67. We have strengthened our efforts to explore new onshore gas fields. Steps have been taken to strengthen BAPEX (Bangladesh Petroleum Exploration and Production Company Limited). We have already procured one deep drilling and work-over rig. Procurement of one more drilling rig is underway. I am pleased to inform you - BAPEX has already discovered oil reserve at Haripur and Kailashtila. The drilling of wells of newly discovered gas field 'Sunetro' has begun. In order to explore oil and gas fields onshore at several points, 2-D and 3-D seismic surveys have been conducted.
Development of Energy Management
68. We have created a gas development fund to develop the gas sector. The 'Gas Development Fund Rules, 2012' has also been issued to make it operational. We have been working to update the National Energy Policy. A draft Coal Policy has been framed and it has been posted to the concerned ministry's website to elicit opinions from the public and also from foreign and local experts. The draft of 'Sustainable Energy Development Authority Act, 2011' has already been approved by the cabinet.
69. I propose to allocate Tk. 9,544 crore for power and energy sector, development and non-development budget combined, for the next fiscal year.
(II) Agricultural and Rural Development
70. Agriculture is the life line of Bangladesh. In fact, the question of our survival is inextricably linked with the survival of our farmers. As with the last three budgets, I have considered agriculture and rural development sectors together. I have, therefore, treated rural infrastructure, rural housing and sanitation, land and water resources, fisheries and veterinary, rural electrification and development of small and medium scale industries as an integral part of agriculture. Bearing this in mind, I propose necessary budget allocation for this sector.
Agriculture
Mr. Speaker
71. We have been experiencing consistent growth in our agriculture sector over the last three years. This sector has posted an average growth rate of 4.7 percent per year. Only the crop sub-sector has registered an average growth rate of 5.6 percent. We have a target to make Bangladesh self-sufficient in food by 2013. To achieve this target, we have already framed 'National Agricultural Policy, 2011'.
Agricultural Inputs Support
72. We are providing all possible supports to our farmers. As part of this process, we have already issued 'Agricultural Inputs Support Card' to as many as 1.40 crore farmers across the country. They have been given the opportunity of opening a bank account by depositing only Tk.10. In FY 2010-11, we compensated 3,46,100 farmer families who were affected by flash floods in the haor areas by providing them with fertilizer and seeds free of cost. In FY2011-12, as many as 3,65,206 farmer families from 56 districts received fertilizers and seeds free of cost to produce 'Ufshi Aush and Bona Aush' (Narica). Aside from this, we have also arranged to supply power tillers, tractors and other agricultural equipment to the farmers of 35 districts at subsidised price. A total subsidy of Tk. 17,092 crore has been granted for Urea and Non-Urea fertilizer in the last three years. I propose an allocation of Tk. 6,000 crore for agriculture subsidy in the budget for FY2012-13.
Seeds
73. We have strengthened Bangladesh Agriculture Development Corporation (BADC) to enhance its capacity to supply high yielding variety seeds. BADC used to supply 18 percent of Boro seeds in FY 2008 09. It now supplies about 60 percent of  Boro seeds. In FY2011-12, implementation of a programme for distribution of 1,44,000 MT of seeds of various crops through BADC is in progress. A target has been set to produce 1,66,252 MT of seeds in the next fiscal. 'SAARC Seed Bank' has been established to ensure availability of quality seeds. Moreover, the scope of hybrid paddy cultivation is increasing. As of March of FY2011-12, hybrid paddy has been cultivated in 7,30,000 hectares of land.
Protection of Soil Quality
74. We have taken various steps to enhance the production and use of organic fertilizers alongside the use of inorganic fertilizers to improve the quality of soil. In addition to monitoring of 68 lakh compost pile, 20 lakh new compost pile have been set up during the last three years. At the same time, training has been imparted to 15.87 lakh farmers and 56,659 agriculture extension officers and staff on the latest and most appropriate technology.
Incentive for Maize and Beet Cultivation
75. During FY2011-12, Tk. 5.69 crore was allocated for the small and marginal farmers to facilitate corn cultivation. Alongside, agricultural credit is being provided at only 4 percent interest rate for corn cultivation. This incentive will be continued in the next budget. We are verifying the prospect of cultivating beet-sugar as a raw material for sugar production. The decision to provide incentive in this sector will be taken in future on the basis of research findings.
Agriculture Credit and Crop Insurance
76. In the current fiscal year, up to April, 2012, 73.9 percent of agricultural credit has been disbursed against a target of Tk. 13,800 crore. In the next fiscal year, the target of agricultural credit will be raised to Tk. 14,130 crore. In the previous budget, I made a commitment to introduce a pilot programme for crop insurance. I am pleased to inform you that a crop insurance scheme on pilot basis has been introduced at Madhabpur upazila under the district of Habiganj with the sponsorship of Shadharan Bima Corporation.
New Variety of Paddy
77. The most of the food grains in the country are produced in the Barind area of the northern region. To meet the increasing demand for food grains, we are giving emphasis on extension of paddy cultivation in flood, saline and drought prone areas. We are emphasizing on innovation of new-varieties of paddy. The cultivation of salinity-resistant Bina-8 and Bri-47 paddy has already begun. Besides, new varieties of paddy called Bri-53 and 54 for salinity-prone areas and Bri-51 and 52 for the flood prone areas have been invented. The piloting of these new varieties is taking place and their cultivation will begin soon. In addition, another variety of drought-prone paddy called 'Narica' has been collected from Africa. Meanwhile, it has been possible to eradicate Monga permanently by cultivating Bina-7 along with adoption of integrated farming activities and implementing social safety net programmes.
Widening the Area of Cultivable Land
78. Production of sufficient food grains for a huge population in a limited space of arable land is indeed a daunting task. For this reason, we have laid emphasis on expanding cultivable land. We have been able to bring 15,67,000 hectares of land under cultivation by addressing the water logging problem, expanding irrigation facilities through utilisation of surface water in southern region and draining out water in haor areas.
Mr. Speaker
Agricultural Marketing
79. In order to ensure fair prices for farm produces, we have already formed 490 'Farmers Marketing Group' and 18,000 'Farmers Club' and built growers' market in 60 upazilas, and wholesale markets in 21 districts. In the next fiscal, we have a plan to form 800 farmers' clubs and construct 8 assemble centres.
Agricultural Research
80. I mentioned in my last budget speech that, for the present government, the event of decoding genome sequencing of jute had been an epoch-making success in agricultural research. It has opened up further opportunity for inventing new stress resistant high yielding varieties of jute. I firmly believe that the 'Endowment Fund' created for agricultural research will have important contribution in overall agricultural research including finding of high yielding varieties of jute and application of important research findings. In this regard, 'Bangladesh Agricultural Research Council Act, 2012' will help take agricultural research forward.
e-Agriculture
81. We are trying to provide solutions to the farmers on farming issues via agricultural information centre, video conferencing and mobile SMS. Currently, the agricultural information communication centres in 95 unions have started their activities and steps have been taken to open such centres in another 150 unions. All the unions across the country are maintaining information databases. Agricultural services are also being provided through these databases.
82. I propose to allocate Tk. 8,917.52 crore, development and nondevelopment budgets combined, for the Ministry of Agriculture in the budget for FY2012-13.
Fisheries and Livestock
Mr. Speaker
83. The importance of fisheries and livestock sub-sector is crucial in Bangladesh where agriculture is the mainstay of its economy. The contribution of this sub-sector to GDP is 8 percent. Also, almost 90 percent of animal protein in our daily food intake comes from this sector.
Development of Fisheries Sector
84. In the current fiscal year, fish production will increase to 32.2 lakh MT. We have further strengthened our programmes for releasing fish fries in open water bodies. The number of fish-sanctuaries in the rivers and water bodies has been increased to 500. As a result, 12 virtually extinct species of fish have reappeared. We have ensured safe breeding of Hilsha and increased the number of shrimp farms. Together with this, we have extended the facility of fisheries sub-sector based e-services.
Development and Management of Marine Fisheries
85. Bangladesh has got immense potential of marine fishing from its 1,66,000 square KM maritime territory. The prospect of such fishing has got even brighter as our legal right has been established on additional 1,11,000 square km of sea after the verdict passed by the International Tribunal for the Law of the Sea concerning maritime boundary delimitation in the Bay of Bengal. We hope that an infinite scope will be opened up by marking off new fishing spots in this extended area.
86. We hope that, in the next year, with proper research, legal framework and incentives, fish production might exceed 34 lakh MT mark. Milk production will be 30 lakh MT, while meat production will be 20 lakh MT and egg production will be 791 crore. Yet I regret the fact that despite various incentives, domestic milk production can only meet 20 percent of the total demand.
87. I propose to allocate Tk. 949.73 crore, development and nondevelopment budgets combined, for the fisheries and livestock sector in the budget for FY2012-13.
Food Security
Mr. Speaker
88. We have always laid emphasis on food security. It is known that food production is being threatened by unexpected risks arising from climate change across the world. This has made the food market unstable. In this context, to ensure inter-generational food security, we have already formulated 'Country Investment Plan for Food Security' and the 'National Food Policy Plan of Action' which are under implementation.
Food Security Programme
89. It is indeed a formidable challenge for the Government to ensure fair price for the agricultural produces while keeping the prices of food grains within the purchasing power of the poor. In the meantime, we have distributed 12 lakh fair price cards among the poor farmers. Besides, we have enhanced the allocation and widened the coverage of VGD, VGF, GR and food for works programme. The number of beneficiaries of these programmes is about 3 crore.
Emergency Food Stock
90. You will be glad to know that we have now a stock of 14,76,115 MT of food grains in the government silos, which has surpassed the previous record. This stock will ensure supply of foods during emergency. In the current fiscal year, the prices of food grains have gone down in the domestic market compared to those of the previous years. For this reason, the sales volume of rice under OMS programme has been reduced to ensure fair price of food grains. We have also increased domestic procurement of food grains. I am pleased to let you know that our government has procured a record 3.50 lakh MT of rice during the Aman season. The Government has decided to procure another 10 lakh MT of food grains during the Boro season. Given that the number of population is growing, I mentioned in my previous budget speech that we want to raise the storage capacity of Government silos to 22 lakh MT by 2015 to maintain emergency stock. In the last 3 years, we have increased the storage capacity of government silos from 14.50 lakh MT to 16.50 lakh MT and it will be further raised by 2.40 lakh MT by 2013, Inshallah.
Water Resources
Mr. Speaker
91. Water is one of our main resources. We, therefore, attached importance to water planning, development and management from the beginning. The 'Bangladesh Water Usage Act 2012' has been approved in principle by the cabinet. However, we have not yet been able to amend the 'Water Resource Planning Act, 1992' as per our commitment.
Recent Achievements
92. During the last three years, we have carried out 43.10 km of dredging, repairing and maintenance of 140.30 km river bank, repairing of 251.20 km flood control structure and reclaimed about 300 hectare of land from the sea. At the same time, 1.60 lakh acre of land has been freed from flood while another 0.87 lakh acre has been brought under irrigation facilities. 49 km of new irrigation canal has been excavated and 33.8 km has been re-excavated. 20 big towns, 70 Upazila headquarters and 500 important historical places have been protected from river erosion. Additional 97.50 metric ton of crops have been produced in 60 hectares of land by controlling flood and ensuring water drainage.
Increased Navigability
93. In order to increase the navigability of rivers and prevent river erosion, we have given stress on capital dredging together with maintenance dredging. Dredging of the Buriganga, Turag, Balu, Pungli and Dhaleshwari rivers are going on under the Buriganga reclamation programnme. The second phase of dredging in the Gorai river has been completed to reduce the problems of salinity and siltation in the southern region. We are looking forward to completing the feasibility study on the Ganges Barrage project in this fiscal year. Side by side, the design work of the barrage is progressing fast. In the Ganges-Brahmaputra Basin, Bangladesh performs the responsibility of flashing out almost all waters, even though only 6-7% land of this Basin falls into the territory of Bangladesh. In discharging this responsibility, we have to bear the brunt of heavy siltation and onslaught of frequent floods. In order to discharge this responsibility in an appropriate manner, we should continue to carry out regular dredging in some selected rivers. Therefore, we shall identify those rivers in future and seek participation from our neighbouring countries in carrying out maintenance dredging in these rivers.
Development of Haor and Wetland
94. The task of creating a database and an integrated master plan for the overall development of Haor and wetlands is in progress. I trust this task will be completed within the next fiscal year. We have also taken initiatives for prevention of flash flood and water drainage in the Haor areas.
Rehabilitation of Landless People in Coastal Areas
95. 15,903 acres of land have been allotted to 11,298 landless families by recovering the rising char lands from illegal encroachment in the coastal areas. In the next five years, steps will be taken to rehabilitate another 9,586 families in 5,550 hectares of land. Alongside, we plan to reclaim 20,000 hectares of land by building cross dams in the coastal regions. By this arrangement, 16,000 poor families will be rehabilitated.
Development of Flood Forecasting and Warning System
96. We are now able to make 3-days advance flood forecast at 38 points. Making 7-days advance forecast would soon be possible through upgradation of the system. We are continuing with our efforts to quickly reach the flood forecasts to the people. Besides, for the purpose of climate change adaptation and disaster risk mitigation, measures of salinity forecasting and basin development will be undertaken in the coastal areas.
97. I propose to allocate Tk. 2,890.74 crore, development and nondevelopment budgets combined, for the water resources sector for FY2012-13.
Rural Development
Mr. Speaker
Construction and Development of Rural Infrastructure
98. In order to develop the rural economy, we undertook various projects of infrastructure development during the past three years. In our current tenure, 12,409 km of rural road and 1,37,880 meter of bridges and culverts have been constructed up to January 2012. Another 81,887 km of rural road and 84,052 meter of bridges/culverts, 979 growth centres and market places have been developed. As many as 722 Union Parishad complexes have also been built. Bearing in mind 2021, an infrastructure development and maintenance plan has been formulated to ensure balanced development of rural areas.
Supply of Safe Drinking Water
99. For the purpose of supplying safe drinking water throughout the country, addressing water logging problems and constructing sewerage system in the urban areas, 29 development projects are being implemented by the Public Health Engineering Department and WASA. The present Government has built 1,30,823 arsenic free water sources across the country. Now for every 95 people in rural areas there is at least one source of safe drinking water. We hope to build another 42,000 safe water sources in the next fiscal year. In my first budget speech, I pledged to ensure safe drinking water for all by 2011. We are slightly lagging behind in this regard. Till now, we have been able to bring 88 percent people under the coverage of safe drinking water.
Sanitation
100. We have set the target to ensure 100 percent sanitation by 2013. Our progress in this sector is satisfactory. So far, we have built and supplied 8,22,384 low-cost sanitary latrines. Presently, about 91 percent families in Bangladesh have come under sanitation coverage which is the highest among the SAARC countries.
Protecting Interest of Marginalised People
101. We have formulated the 'Bangabandhu Poverty Alleviation and Rural Development Academy Act, 2012' for the purposes of conducting research on poverty alleviation and imparting vocational and technical training to the rural people. We have established 128 cooperative markets throughout the country so that rural people can buy daily essentials at a fair price. This system has ensured preserving the quality of essential commodities and sale of farm produces at a fair price. We have plans to expand the programme throughout the country.
Rural Electrification
102. Rural Electrification is our priority programme as it is one of the means to realise our Vision. We have brought additional 2,107 villages under the coverage of rural electrification during the last three years. Additional 13,084 km power distribution lines have been set up. Now, the total number of villages under rural electrification is 48,711(65 percent). The total number of beneficiaries is about 4.5 crore. Total distribution line now stands at 2, 27,667 km. In rural areas where electricity cannot be supplied from the grid, about 11.20 lakh solar home systems have been established with the assistance of Rural Electrification Board and IDCOL. The work is in progress for installing 190 solar irrigation pumps and 200 bio-gas power plants. Recently, as per our commitment, steps have been taken to produce  electricity from the husk of paddy with the financial assistance from IDCOL. I hope, we will be able to supply electricity to every village by 2021. Meanwhile, we have installed 15,000 bio-gas plants to solve the energy problem of the rural people.
103. I propose to allocate Tk.13,549 crore for the Local Government Division, Rural Development and Cooperatives Division, development and non-development budgets combined, for the FY2012-13.

(III) Human Resource Development
Mr. Speaker
104. Educated and skilled human resource is the main driver of development of an economy. We have, therefore laid emphasis on human resource development. I propose a total allocation of Tk. 39,390 crore for human resource development in the budget for FY 2012-13.
Overall Education Sector
Mr. Speaker
Implementation of Education Policy
105. Our Government is attaching highest priority to education as the most important strategic tool for eradication of poverty and development. We have formulated an Education Policy, 2010 assimilating the essence of the charter for change, 'Vision 2021' and our commitment for building Digital Bangladesh. We have planned to implement this Policy in phases.
Elimination of Disparity and Quality Enhancement
in Education Sector
106. In a bid to eliminate disparity in the education sector, the Government has started distributing books free of cost to the students of primary level including secondary, dakhil, vocational and ebtedai levels from FY2011-12 throughout the country. As planned, a total of 23 crore books have already been distributed in 2012. Distribution of stipends is another ongoing initiative to promote female education. Currently the male-female student ratio is 47:53, which is the 2nd highest in South Asia. Besides, as many as 43.38 lakh students from the secondary to graduation level have been awarded stipends. We have also given emphasis on teachers' training, in particular on subjects like Mathematics and English, to enhance the quality of education. We are also laying emphasis on expansion of vocational and technical training and to develop appropriate skilled manpower for export to the overseas markets. At the same time, in an attempt to search creative talents throughout the country, a 'Creative Talent Hunt Policy, 2012' has been formulated. I hope this initiative will see successful implementation from the next fiscal year.
Decentralisation of Education
107. Various kinds of facilities are being enhanced along with infrastructure development to improve the teaching environment of the educational institutions. Construction work of academic buildings of 1,500 colleges have been initiated. In order to remove urban-rural disparity in education, we have established as many as 306 model high schools in those upazilas, where there is no government high school. Construction and other physical infrastructure works are underway to build another 164 model high schools.
Higher Education
108. In order to reorient our higher education more towards science and technology, we have established a Science and Technology University at Pabna. There is also a programme to establish a Digital University at Gazipur and Bangabadhu Science and Technology University at Gopalgonj. Besides, we have established University of Professionals in Dhaka, and Begum Rokeya University at Rangpur. Moreover, we have taken steps to establish two public universities at Rangamati and Barishal, and Rabindra University at Kushtia. We believe that, these initiatives will enable our new generation to face new and emerging challenges of thiscentury.
Prime Minister's Education Assistance Foundation
109. Education is the fundamental right of human being. We have, therefore, taken an initiative to establish a Trust Fund to ensure education for the poor and underprivileged meritorious students. A law titled 'Prime Minister's Education Assistance Trust Act, 2011' has already been enacted.
Primary and Mass Education
Mr. Speaker
Achievements in Primary Education Sector
110. Eradication of illiteracy by 2014 is one of our prime commitments. Even though it took a little longer, we have ensured cent percent enrolment at the primary level as per our commitment. We have introduced pre-primary education programme for the children of 3-5 years age group. From 2011, examination on completion of primary education has started taking place throughout the country under a uniform system. As a result, it is now possible to assess the merits of primary students using a set of uniform criteria. A policy on non-formal education has been formulated to eradicate illiteracy.
Qualitative Improvement of Primary Education
111. Along with its expansion, we are determined to enhance the quality of primary education. Already, we have brought down the teacher-student ratio to 1:47 from 1:50 and want to bring it down further to 1:40. In order to ensure necessary infrastructure and academic environment, we have taken up for implementation a comprehensive sector wide programme (Third Primary Education Development Program, PEDP-3) at a cost of Tk. 58,359 crore. A total of 47,680 teachers will be recruited under this programme. We had a plan to raise the number of female teachers in primary schools to 60 percent. Already, we have raised the number to 58.4 percent. In my previous budget speech, I mentioned about the establishment of 1500 new primary schools. Already, construction of a total of 780 primary schools is at the completion stage. In addition, we have brought required reforms in primary education management by establishing Primary Teacher Training Institute (PTI) in 12 district headquarters, formulating a manual on inclusive education, organising training for the teachers on the manual and restructuring school management committees.
Prevention of Drop-out
112. The present Government is continuing the stipend programme, at a cost of about Tk. 4,000 crore, intended to prevent dropping out due to poverty. In addition, a School Feeding Programme has been taken up to increase the rate of enrolment and retain the students at school.
Information Technology in Education Sector
113. We have a plan to introduce e-Learning in all the educational institutions across the country. Already, multimedia classrooms have been set up in each model primary school. ICT labs have been installed in 3,172 secondary and higher secondary schools.
Health and Family Welfare
Mr. Speaker
General Health Service
114. One of our election pledges is to ensure quality health services for all. To fulfill this pledge, we have prepared the 'National Health Policy, 2011'. The 'National Drug Policy 2005' is being updated. The policies and programmes that we have adopted over the last three years in this sector have now started yielding intended results. We have earned enviable success among the SAARC countries in terms of reduction of maternal mortality and infant mortality rate as well as increased life expectancy. According to Bangladesh Demography and Health Survey 2011, the under-5 infant mortality rate has been reduced to 53 from 65 per thousand over the past four years. Likewise, the maternal mortality rate has also gone down to 1.94 from 3.5 per thousand. Currently, one third of the country's women in confinement receive the assistance of the trained health workers during child birth. To increase this number further, we are taking an initiative to train 40,000 health workers of various tiers over the medium term. There is an ongoing programme titled 'Maternal Health Voucher Scheme' to improve maternal health of poor pregnant mothers in 46 upazilas. We have planned to expand this programme to another 27 upazilas. Beside this, 24hour emergency maternal care service will be provided in 96 upazila health complexes.
Urban Health
115. In order to improve the health quality of poor city dwellers living in 6 city corporations and 5 municipalities in Bangladesh, primary health care service is being provided through 27 urban maternity clinics, 167 urban health centres and 656 satellite clinics. 30 percent of the services delivered at the urban health centres are provided free of cost. Beside this, we are continuously trying to popularise the alternative health care system. To this end, steps have been taken to prepare necessary rules and to recruit manpower.
Community Clinic
116. In the budget for FY2009-10, we had committed to establish 13,500 community clinics. As of now, 11,409 clinics have been commissioned. As many as 7.56 crore people have taken services from these clinics in the last three years. The remaining 2,091 clinics will hopefully be set up and made operational by FY2012-13.
Population
117. In my previous budget speech, I mentioned about undertaking a post-enumeration check (PEC) of the Population Census and Household Survey 2011. Meanwhile, Bangladesh Institute of Development Studies (BIDS) has published the results of the PEC. According to this, the population of Bangladesh now stands at an estimated 14.80 crore. We are working on our Population Policy to update it. One of our future challenges will be to ensure food, clothing, shelter, health and education for this population.
Family Planning
118. We want to increase the rate of contraceptive use by 80 percent within 2021 to address the enormity of the problem arising from the growing population. We have, therefore, made adequate budget allocation for this purpose. We have built up sufficient stock of contraceptives which can meet the demand up to 2013. In the meantime, the rate of use of contraceptives has increased to 61 percent from 56 percent during the period from 2007 to 2011.
Manpower and Infrastructure Development
119. We have taken up the task of upgrading in phases all upazila and district level hospitals to 50 bed and 250 bed hospitals respectively. In the meantime, 251 upazila health complexes have been upgraded to 50-bed, 16 district hospitals to 100-bed and 8 district hospitals to 250-bed hospitals respectively. In order to improve the physician-population ratio, we have recruited 3,551 physicians and have established five new medical colleges. In parallel, steps have been taken to increase the number of nurses and paramedics to improve the doctor, nurse and paramedics ratio to internationally accepted 1:3:5. For this purpose, five institutes of health technology have been established and there is a plan to establish ten more. In addition, we have a plan to construct 5 new nursing colleges and upgrade 15 nursing institutes to nursing colleges. In the last three years, 6,391 health assistants, 370 health technologists, 605 nurses and 856 family welfare visitors have been recruited.
ICT in Health Services 
120. In my previous year's budget speech, I pledged to increase the use of ICT in health service. We have already taken an initiative to introduce e-Health programme. In 482 hospitals at zila and upazila level, a programme has been launched to provide health services through mobile  phone. Internet connectivity has been provided to 800 health organisations. Telemedicine facility has been introduced in 8 hospitals through which patients can now take advice of medical specialists at upazila and zila level. Side by side, a system has been introduced for disseminating information on breast-feeding, pregnancy, national immunisation programme and timetable of feeding vitamin-A capsule to the people through SMS. Our successful application of ICT in health sector has been widely acclaimed and the Hon'ble Prime Minister has been honoured with the prestigious 'Digital Health for Digital Development' award by the United Nations.
Nutrition
Mr. Speaker
121. We have certain failures in parallel to our success. We are still lagging behind in terms of achieving the MDG nutrition targets. Currently, 36 percent of our infants are under-weight. A National Nutrition Service Programme has been taken up to overcome the problem of malnutrition. In our nutrition scheme, being delivered under the community nutrition  programme, we want to raise the rate of local participation  up to 50 percent from 25 percent. Primarily, we have a plan to cover 35 percent pregnant mothers and infants to provide them with food supplements at the Upazila level. Aside from this, 90 percent of the children will be administered Vitamin 'A' capsule. We have earned record success in increasing awareness on the benefit of breast feeding. Our target was to scale up the percentage of exclusive breast feeding for six months by lactating mothers to 50 percent by 2016. However, we have been able to raise this percentage to 64 percent by 2011.
122. I propose to allocate Tk. 9,355 crore for FY2012-13, development and non-development budgets combined, for the Ministry of Health and Family Welfare.
Culture
Promoting Bangalee Culture 
Mr. Speaker
123. Culture epitomises the history and spirit of a nation.  As a nation, we are religious, but at the same time, we are also liberal and non-communal. In order to preserve our national entity and to develop our indigenous culture, we took up a special programme under nondevelopment budget at a cost of Tk. 100 crore in FY2010-11. In tandem,  we have taken an initiative to promote our nearly  extinct folk-culture. Since we assumed office, we  adopted a range of programmes for practicing, collecting, preserving and developing Bangla language, literature and culture. To this end, I made a commitment in the budget for FY2011-12 to establish a National Art Gallery at the premises of Shilpakala Academy and to develop Bangladesh Lok O Karushilpa Foundation. Two projects are being implemented for this purpose. We organised season-bound cultural events in all 64 districts. Several steps were taken to promote the  reading habit. We have also formulated an integrated policy for supply of books to the libraries. Public libraries have been set up in 31 districts and setting up 14 more are underway. 
Archeological Exploration
124. I believe we can uphold the positive image of our country before the outside world through extensive promotion and publicity of our cultural heritage. To this end, steps have been taken to establish cultural centres in different countries. Hopefully, two cultural centres will be  established in Kolkata and New York next year. Steps  Archeological  have been taken to explore and preserve the Exploration  archaeological sites. The preservation and development programme of archaeological sites is going on throughout the country including Mahasthangarh, Paharpur, Kantajeu, Mahabaleshwar and Bagerhat. Excavations and exploration work in Wari-Bateshwar and Bikrampur are also in progress.
125. I propose an allocation of Tk. 195.57 crore, development and nondevelopment budgets combined, for the Ministry of Cultural Affairs. 
Religion
Religious Harmony 
Mr Speaker
126. We believe in liberal religious culture. Consistent with this, we organised trainings for religious leaders and held ten inter-religion dialogues. As many as 3,433 imams, shebaites, priests, Buddhist monks  have been trained. In FY2012-13, a further 3,500  such people will be trained and 12 more inter-religion dialogues will be organised. We are determined to prevent violence on and discriminatory treatment against the religious minorities. We are continuing to work to safeguard their social status and ensure equal rights everywhere in the national and social life as enshrined in the Constitution.
Hajj
127. We are consistently successful in setting up Hajj camps, carrying  Hajj pilgrims safely and providing all-out support during the performance of Hajj in Saudi Arabia. In FY 2011-12, a record number of    pilgrims performed their Hajj. We expect that the number of  pilgrims will surpass the 1,20,000 mark in FY2012-13. Moreover, we are providing informational services to the pilgrims by opening a website.
Mosque and Temple based Education Programme 
128. We are continuing with the mosque and temple-based pre-primary and religious education programmes. In the    last three years, 23.40 lakh students were  imparted pre-primary education, 65,770 were imparted mass education and 10.23 lakh individuals were imparted literacy on the Holy Quran through this programme.
129. I propose to allocate a total of Tk. 265.70 crore, development and non development budgets combined, for the Ministry of Religious Affairs in the budget for FY2012-13. 
Youth and Sports
Mr. Speaker
130. Our youth community bubbles up with the most creative energy.  We have introduced national service to involve the youths in national development programme. Under this programme,  National service  temporary employment opportunities have been created in Kurigram, Borguna, Gopalganj and Rangpur districts. As of now, 56,801 unemployed youths - male and female, have been trained. Two years temporary employment opportunities have been created for 56,126 youths. In FY2012-13, there is a plan to provide training to 17,744 youths and to create temporary employment opportunities for 56, 959 youths, under this programme. 
Training and Micro credit 
131. Throughout the country skill-enhancing training progamme for the  unemployed youths is going on in 111 formal and 476 non-formal training centres. In the last three years, a total of  13,11,797 individuals were trained. In FY2012-13, there is a target to train a further 4,37,265 people. To encourage self-employment, the Directorate of Youth Development has distributed Tk. 219.33 crore as micro-credit among 1,15,460  trained youths, male and female, form January 2009 to March 2012.
Sports Infrastructure and Management
132. In my previous budget speech, I mentioned that 5 cricket stadiums were upgraded to the international standard for holding the World Cup Cricket. The overall management including inauguration ceremony of ICC  World Cup 2011 held in  Bangabandhu National Stadium has been widely acclaimed. The process of modernisation and renovation of stadiums and women sports complexes is going on at the district level throughout the country including Dhaka. Moreover, we are working for the revival of the nearly extinct games, rooted in our rural culture.
Achievements in Sports
133. Recently, Bangladesh cricket team has brought special honour for the nation by becoming the runners-up in Asia Cup. Our female cricketers have earned one-day status in cricket arena. Our mentally challenged boys  and girls have earned a special distinction by winning 44 medals including 29 gold medals in the World Special Olympic 2011 held in Athens.  We believe that our players will bring more successes in future. Special facilities are necessary for organising sports for disabled persons. They require play-grounds and special types of sports items. I declare a special allocation for disabled persons for the Ministry of Youth and Sports.
134. I propose an allocation of Tk. 687.61 crore for non-development and development budgets combined, for the Ministry of Youth and Sports in the budget for FY 2012-13.
(IV) Physical Infrastructure 
Roads and Bridges
Mr. Speaker
135. In my previous budget speeches, I laid emphasis on integrated  development in communication sector. To this end, Integrated Multimodal Transport Policy (IMTP), 2012 has been  Integrated Transport Policy  framed. 'Dhaka Transport Coordination Authority Act, 2012' has also been approved. Under this Act, Dhaka Transport Coordination Authority (DTCA) has already been formed. I hope this Authority will have a strong role in the Capital's transport coordination.
Strategic Transport Plan
136. From the outset, we have attached importance to building a sustainable, safe and quality mass transport system to achieve desired socio-economic development.  With this aim in view, a 20-year Strategic Transport Plan (STP) has been approved by the Government to establish discipline in the road transport sector, reduce accidents and ease traffic congestion. Under this plan, steps have been taken to implement the MRT6 (Mass Rapid Transit, Line-6). Besides, steps are also underway to launch Bus Rapid Transit (BRT) for rapid movement of buses between Gazipur and Hazrat Shahjalal International Airport and between Airport and Sadarghat. The Elevated  Expressway will connect Hazrat Shahjalal International Airport (HSIA) with 'Mayor Mohammad Hanif flyover instead of Kutubkhali point on Dhaka-Chittagong highway by extending it to Kamalapur. As a result, its length will be shortened by 3 km from 26 km as was planned earlier. The activities relating to land acquisition and utilities transfer are in progress to facilitate the construction of the Dhaka Elevated Expressway. In addition, steps have also been taken to construct Dhaka-Ashulia Elevated Expressway from Hazrat Shahjalal International Airport to Chandra. Despite our sincere efforts, there has not been much headway in the construction of circular roads and railways around Dhaka.
Easing Traffic Congestion in
Dhaka and Chittagong City
137. We hope to complete within the next fiscal year the much expected integrated development project of Hatirjheel area with Begunbari khal to ease growing traffic congestion in Dhaka city. Construction of 10 km long 'Mayor Mohammad Hanif Flyover' from Jatrabari to Palashi and about 3  km long Kuril flyover will be completed Easing Traffic Congestion in  within 2012, Insha Allah. Besides, Dhaka and Chittagong City  construction of flyovers at Maghbazar-Mouchak and Paltan to Dhaka-Mawa roads point and an overpass at Banani rail crossing are underway. A plan of constructing a continuous corridor under PPP from Amin Bazar to Palashi has also been undertaken. In Chittagong, 5 more flyovers are being constructed by the Chittagong Development Authority.
Achievements in  Road Sector 
138. In order to build a safe and quality road communication system, we have adopted a 20-year Road Master Plan and taken a range of steps to implement the plan. For your information, I would like to present some statistics that will illustrate our achievements in the road sector. After assumption of office this time, we have reconstructed, broadened and  strengthened a total of 2,912 km of national, regional and district roads. As many as 1,063 bridges and culverts and 7,2 93 km road have been repaired. It should be pointed out that road density in Bangladesh is the highest in the world. There is 2,079 km of road in every 1,000 square km area. For this reason, we are laying more emphasis on regular and quality maintenance of the existing roads rather than on construction of new ones. I believe that if we can  properly enforce traffic rules and introduce road pricing, traffic congestion will not only be reduced, additional resources will be generated for road maintenance. We have planned to take an initiative to let the Roads and Highways Department and the Local Government Engineering Department together conduct a survey on mapping all roads across the country and on the basis of that survey develop a 20-year plan for this sector. This plan should factor in the following aspects:
(1) avoid construction of new roads to restrain expansion of road network
(2) no new road to be constructed within the current road network except union and rural roads
(3) highest priority will be given to the repair and maintenance of the existing roads. This will require a crash programme to accomplish the repair and maintenance work neglected so far
(4) development projects for the existing roads may be undertaken where necessary subject to appropriate survey
(5) in widening road network, vertical method should be adopted rather than the horizontal one
(6) the participation of local community should be ensured in the road maintenance work and therefore, a portion of maintenance cost should be disbursed to them
(7) where possible, toll collection system should be introduced for roads and bridges
(8) steps should be taken to introduce road pricing for the use of roads
(9) in order to ease traffic congestion, sedan cars should not be allowed to ply the city roads unless three passengers travel together. Otherwise, extra toll should be imposed.
139. The work of several key projects including conversion of Dhaka-Chittagong Highway into four lanes and Nabinagar-DEPZ-Chandra Road, development of Joydebpur-Mymensingh road and construction of Teesta Bridge Project are going on in full swing. A flyover has been opened for traffic to ease cargo transport in the Chittagong port. Besides, we have launched the Project Monitoring System (PMS) at the Road Division. Soon, e-Tendering would be operationalised.
Padma Bridge
140. The construction of Padma Bridge is one of the main election pledges of the present Government. The detailed design of 6.15 km long Padma Bridge including its DPP was finalised by October 2010. The programme of land acquisition and  rehabilitation of project affected people will be completed by the end of this fiscal year. There are several proposals under PPP as well as from development partners for the construction of the bridge at our disposal. Hopefully, the construction of the bridge will begin soon. On the other hand, steps have been taken to construct the 2nd Padma Bridge at Paturia-Goalanda point under PPP. The feasibility study of Bekutia Bridge over the river Kacha across the Pirojpur-Jhalokathi road has been completed.
Railways  
Priority on Rail Communication 
Mr. Speaker
141. I mentioned in my previous budget speech that by giving special  priority to railways we have created a new ministry called 'Ministry of Railways'. We have taken initiatives  to change Bangladesh Railway into a corporate organization. To this end, the system of Lines of Business (LOB) has already been introduced in Bangladesh Railway. We are considering to undertake the implementation of 231 projects at a cost of  Tk. 1,25,929 crore under a 20 year Railway Master Plan. Our aim is to turn railway into a modern mode of transportation by improving the quality of service.
Expansion of Railway Service 
142. Already, 15 pairs of new train have been added. The services of 8 pairs of train of different routes have been expanded. Side by side, we have undertaken projects to construct new rail lines and reconstruct the old  ones. Steps have been taken to connect Bangladesh Railway to sub-regional, regional and international railway networks. In order to link with Trans-Asian Railway, the construction of railway tracks from Dohajari via Ramu to Cox's Bazar and from Ramu to Gundum is continuing. I mentioned in my previous budget speech that under the e-Ticketing programme, we have introduced the facilities for obtaining ticketing information and tickets via cell phones and internet.
Rail Infrastructure Expansion 
143. Steps have been taken to upgrade Dhaka-Chittagong railway corridor to double line tracks. An agreement has been signed to construct double line tracks in Tongi-Bhairab Bazar and Laksham-Chinki Astana sections. In future, we have plans to construct third and fourth lines in Dhaka-Tongi and dual guage double tracks between Tongi-Joydevpur and Dhaka-Narayangonj sections. We also have plans to gradually construct double line tracks in different important sections of the country including  the Khulna-Parbatipur section. Alongside, we have taken steps to construct the 2nd Bhairab and 2nd Titas Bridges. Already, 9 locomotives have been added to the train fleet and procurement of 11 more is under process. Steps have been taken to collect additional 26 broad-gauge locomotives, 246 tank wagons, 220 flat wagons and 10 sets of DEMU (Diesel Electric Multiple Unit) in future.  Moreover, a total of 55 wagons have been procured. Procurement of another 37 locomotives and 465 wagons is underway.
144. The total allocation for railway in the budget of FY2008-09 was Tk. 2,127 crore which was enhanced to Tk. 3,891 crore in FY2011-12 resulting in 83 percent increase over the last three years. I propose to allocate Tk. 10,390 crore for roads and railways sector, development and non-development budgets combined, for the next fiscal year. 
Water Transportation
Mr. Speaker
145. Bangladesh is a riverine country. Water transportation as an alternative mode of communication and transportation system is, therefore, immensely important. Implementation of the integrated plan undertaken for the development of waterways is in progress. Under this plan, procurement of 18 dredgers is underway and 2 have already been procured to enhance navigability of waterways; 53 lakh cubic meters of dredging has been completed; 4 inland river ports have been established and 2 others have been modernized. Moreover, 2 container river ports have been established. Landing facilities have been created at Kachpur, Sandwip and Kumira. A total of 35 km of waterways and 5.5 km of walkways have been built around Dhaka city to prevent illegal encroachment. Already, a number of private sector organisation are engaged in river dredging and many of them have their own dredgers. However, all big dredgers are owned by the government. There should be coordination between the government and private sector organisations in the use of dredgers. Therefore, it would be appropriate to constitute a steering committee comprising representatives from inland water transport agencies, two river port agencies, Ministry of Water resources and private sector entities.
Sea Port 
146. Recently, the Chittagong sea port has attained international standard in terms of competence indicators. About 92 percent of total imports and exports of the country is handled through this port. The process of automating the port has already been completed to ensure greater efficiency in service delivery. In order to ease container congestion at the Chittagong port, an inland river-based container terminal with a  handling capacity of 1,60,000 TEUs container has been constructed at Pangaon near Dhaka. Both the arrival of vessels and the cargo handling capacity at Mongla - the second sea port of Bangladesh, have increased. Because of its convenient location, this port has bright prospects of transporting transit cargos of India, Nepal and Bhutan. We have adopted plans to create various facilities at the Mongla port including dredging of the Poshur River. In order to ease goods transportation from this port, effective steps have been taken to put up railway tracks from Khulna to Mongla. Besides, we are continuing with our efforts to attract foreign investment in constructing a deep sea port at Sonadia.
Land Port
147. One of our election pledges was to raise the capacity of land ports.
Accordingly, development and operation of 6 land ports on Build, Operate and Transfer (BOT) basis has already kicked off. At the  Benapole land

Raising income tax collection to augment revenues targetted

port, storage facilities for imported and exported cargo have been created. Development of Bhomra and Nakugao land ports are going on in full swing. Besides, the work of putting up commercial facilities at Ramgar and Thegamukh land ports is also going on.
Civil Aviation 
Mr. Speaker
Capacity Building of Biman
148. We made a pledge to turn Bangladesh Biman into an efficient and service-oriented organization. In this area, we may not have achieved much success but we are continuing our efforts. We have a plan to procure 10 aircrafts for Bangladesh Biman in phases. Two aircrafts were added to the fleet by end of 2011. Two more will be collected by 2013. Side by side, according to our commitment, the processes of travel and cargo carrying by Biman have been brought under e-Commerce. Our efforts are continuing to upgrade Hazrat Shahjalal International Airport to a Category-1 airport within the next fiscal year. The work for developing Cox's Bazar Airport has already begun. We also have a plan to transform Khan Jahan Ali STOL port into a full-fledged domestic airport. At the express interest of the Bhutan Government to use Syedpur Airport, negotiations are now going on between the two Governments. Besides, we have agreed in principle to undertake a plan to build Bangabandhu Sheikh Mujib International Airport as an international aviation hub with all modern amenities at the outskirts of Dhaka. The pre-feasibility study, in this respect, has already been completed. 
Housing and Planned Urbanisation
Mr. Speaker
149. Unplanned urbanisation with growing population is a huge problem for Bangladesh. By 2015, the population size of urban areas will be one-third of the total population of Bangladesh. We are determined to improve the living standards of this huge population through planned urbanisation. In line with Vision-2021, we want to ensure housing and modern city life for all by 2015. To this end, detailed area plans for Dhaka, Chittagong and Sylhet and structural plans for divisional cities of Sylhet and Barisal have already been formulated.
Plot Development and Flat Construction
150. To ensure housing for all, we have taken the task of developing 75,688 plots and constructing 2,12,998 flats in Dhaka and other divisional, district and upazila headquarters. To fulfill the commitment of Hon'ble Prime Minister, we have taken steps to build four satellite towns around Dhaka city. A memorandum of understanding has already been signed with the Government of Malaysia to build satellite cities under PPP at Dhamrai and Kamrangir Char of Dhaka.
Housing Fund
151. The Awami League Government in its previous tenure introduced a housing fund to provide housing for the poor. So far, a total of Tk.160.50 crore has been allotted to this fund. Till February 2012, a total of Tk.132.20 crore has been released from this fund. The total number of flats constructed using this fund is 51,368.
Housing Policy
152. Bangladesh National Building Code (BNBC) has been amended to ensure construction of environment-friendly and safe buildings. We have formulated required policies to bring the real estate businesses under one umbrella. We have taken necessary measures to bring urban planning and use of land by private residential projects together with ensuring protection of cultivable land under a legal framework. 
153. I propose to allocate Tk. 1,461.74 crore for the housing and public works sector, development and non development budgets combined, for the next fiscal year.
(V) Industrialisation
Mr. Speaker
154. In order to build a vibrant industrial sector as well as to enhance the contribution of this sector to GDP from 30 percent to 40 percent by 2021, we formulated the 'National Industrial Policy, 2010'.The salient features of this policy include modernising the economy, transforming it structurally, diversifying economic base, enhancing productivity and promoting small and medium enterprise sector.  
Private Sector Development
155. A developed and responsible private sector is the key driver of an economy. Therefore, in a bid to develop a dynamic private sector as well to expand the industrial sector, we are providing special incentives in the form of exemption from duty/tax, exemption from double taxation, imposition of tax at a lower rate, cash support and support from the risk mitigation fund for potential industries like agro processing, readymade garments and knitwear, ship building and expansion of country's own merchant fleet, light engineering and jute and leather goods. We are also continuing the process of establishing new industries and restructuring the existing ones by injecting working capital and industrial term loans through bank and financial institutions. Up to 31st December of the current fiscal year, the amount of industrial loan disbursed stood at  Tk. 25, 059.89 crore.
Stimulus Package for Export Industry
156. To address the impact of global recession, we took a number of  steps including providing stimulus package for the export-oriented industries. In the previous fiscal year, we successfully addressed the problems arising in the textile sector, particularly the yarn and clothing sub-sector. Special cash incentives have been provided to the textile sector during FY2011-12 to make good the losses due to sudden cotton price escalation in 2010 and 2011.
Environment-friendly Industrialisation
157. After a long lapse of twenty years, we have begun the task of establishing a new fertilizer factory namely Shahjalal Fertilizer Factory. Besides, a Pharmaceutical Industrial Park is being set up at Gazaria, Munshigonj. We are also working relentlessly to shift all the tannery  factories spread all over the country including Hajaribag of Dhaka city to the Leather Industrial City being built around the vicinity of Dhaka metropolis. Installation of the Central Effluent Treatment Plant (CETP), construction of dumping yard and installation of central water supply plant are progressing speedily in the new industrial city. In order to encourage industrial units to install effluent treatment plants, different kinds of tax concessions have been given. Credit will be extended for this purpose under refinancing scheme of Bangladesh Bank. 
Product Quality Control
158. An agency called South Asian Regional Standard Organization  (SARSO) has been established to set appropriate standards of quality for manufactured goods, enhance quality control capacity and maintain balance in the quality of goods in the SAARC region. This will facilitate expansion of export in the SAARC countries and remove intra-trade technical problems.  
Equity and Entrepreneurship Fund
159. We would like to encourage investment in risky but potential software and food processing industries. To this end, a total of Tk. 2,100 core has so far been allocated to EEF (Equity and Entrepreneurship Fund). Out of which, an amount of Tk. 1,225 crore has been released. The projects established under EEF have been making significant contributions to the agriculture and industrial sector. EEF assisted projects have generated 17,000 permanent and seasonal employment.
Strengthening TCB
160. Apart from importing essential commodities by the private sector, we have taken initiatives to import essential commodities by the public sector to reduce market price and to ensure competitive price of commodities. As part of this initiative, the institutional and manpower structure of the state-owned Trading Corporation of Bangladesh (TCB) has been completely reorganised.
Tourism Industry
161. The tourism industry holds out immense potential for our economy. In order to develop and promote the tourism industry, National Tourism Policy, 2010 has been formulated. Meanwhile, physical infrastructure and communication systems of the tourism centres namely Cox's Bazar, Kuakata, Bandarban and Jaflong have been developed. Cox's Bazar Development Authority Act, 2012 has been approved in principle by the cabinet. I believe, this act will have a special role in developing the tourism industry. With a view to attracting tourists from abroad, steps have also been taken for promotional advertisements in local and international media.  
Revitalising Jute Sector
162. In order to revitalize the jute sector, it has been decided to turn BJMC into a profitable organisation by converting it into a holding company. Under the work plan adopted for this purpose, the Government has assumed the liability of all past bank loans and obligations of the entity to the tune of Tk. 2,827 crore. Along with this, we are providing all kinds of assistance to BJMC including cash support to buy raw jute. We hope that BJMC will now be a profitable organisation by ensuring proper utilisation of all Government assistances.
Sugar Industry
163. A digital e-Purji system has been introduced to prevent wastage in public sector sugar mills, bring transparency in sugarcane purchase and prevent harassment of farmers. As a result, sugarcane farmers are now receiving sugarcane purchase order/purji by mobile phones through SMS. This new system has been acclaimed both at home and abroad. Recently, this has got the South-East Asia's best technological award called Manthan Asia Award. Our sugar mills remain in operation for only 5 months. Two options are available to make these mills self-sustaining. Some of the mills can refine crude sugar. The second option is to use beet sugar instead of sugarcane as raw materials. The government is planning to provide incentives for these two options.
Small and Medium Enterprise (SME)
Mr. Speaker
Refinancing in  SME Sector
164. Development of SME sector is one of our main agenda. In order to develop this sector, we fixed a target of Tk. 23,995 crore in the previous budget to be disbursed by the banks and financial institutions as SME loans. In line with this, the banks and financial institutions have strengthened the process of disbursing SME loans. Up to April, 2012, an amount of Tk. 2,330.14 crore has been refinanced under the SME refinancing scheme of Bangladesh Bank.
Women-friendly SME Programme
165. As many as 64 SME helpline centres have been set up at the district level BSCIC Industrial Assistance Centres and another 7 in different trade bodies. All SME entrepreneurs, both male and female, are receiving required information services and training from these centres. All the bank and non-bank financial institutions have been directed to set up dedicated desk for women entrepreneurs. At the same time, at least 15 percent of the refinancing scheme has been allocated for the women entrepreneurs. Moreover, a collateral-free loan programme up to Tk. 25 lakh has been introduced for them. The National SME Women Entrepreneurship Award has been introduced by the SME Foundation to patronise the innovative women entrepreneurs. Apart from this, I propose to make a lump sum allocation of Tk. 100 crore for the women entrepreneurs.
BSCIC Industrial Estate
166. Bangladesh Small and Cottage Industries Corporation (BSCIC) has so far established 74 industrial estates across the country to provide infrastructural facilities to private entrepreneurs in setting up small and  cottage industries. Up to March, 2012, as many as 9,699 industrial plots have been allotted to different industrial units. In FY2010-11, goods worth Tk. 29,027 crore were manufactured in these industrial units, out of which, goods worth Tk. 16,659 crore were export commodities.
(VI) Climate Change and Environment
Mr. Speaker
Climate Change
167. In terms of climate change vulnerability, Bangladesh is the most vulnerable country in the world. Given this reality, Bangladesh has played an important role in the recently concluded 'Climate Change Summit'.  Bangladesh has made substantial contribution towards establishing 'Green Climate Fund' and extending 'Second Commitment Period of Kyoto Protocol'. We have drawn out the 'Bangladesh Climate Change Strategy and Action Plan, 2009' to tackle the challenges of climate change. Moreover, a law titled 'Climate Change Trust Act, 2010' has already been enacted. We have created a fund titled 'Bangladesh Climate Change Trust Fund (BCCTF)' with our own resources. A total of Tk. 2,100 crore has been allocated for 'Bangladesh Climate Change Trust Fund (BCCTF)'  over the last three years. A total of 82 projects on various issues including afforestation have been undertaken with the support of this fund.  I am proposing to allocate Tk. 400 crore to this fund for the next fiscal year. Besides, another fund titled 'Bangladesh Climate Change Resilience Fund (BCCRF)' has been created with an amount of US$ 113.5 million with financial support from different development partners. 
Coping with Disaster
168. We are working to formulate a local plan with a view to measuring the risk of calamities and mitigate them. In parallel, we have prepared a practical guide to build people's awareness on these issues. In addition, the 'National Disaster Management Plan, 2010-15' has already been approved and actions are underway to implement the plan.
Disaster Resistant Houses and Shelters
169. We have constructed 724 barrack houses and allotted them to 7,240 landless families in the coastal areas. Besides, a total of 6,186 cyclone resistant houses are being constructed with the financial assistance from Bangladesh Climate Change Trust Fund. Construction of 74 flood rehabilitation centres in flood-prone and river erosion areas and 100 cyclone centres in coastal areas is in progress. 
Capacity Building for Rescue Operation
170. In recent time, the threat of earthquake across the country including the capital city has intensified. It is, therefore, essential to enhance our capacity to cope with its eventuality. In order to cope with disasters, we have procured essential equipment, emergency vehicles and water vessels. Steps  have also been taken to procure more equipment and other accessories.  'Bangladesh National Building Code' is being properly applied for construction of earthquake resistant buildings. In addition to these, we have continued our efforts to prepare 'Earthquake Risk Map' and update 'Standing Order on Disaster'. An initiative has been taken to formulate a contingency plan for quick rescue from disaster. 
Using Digital Technology for Mitigating the Risk of Disaster
171. We are taking steps to transmit early warning of disasters through cell phone network of Grameen Phone and Teletalk. Initially, the piloting of this programme has begun in cyclone-prone Cox's Bazar and flood-prone Sirajganj districts. In addition, a pilot programme to broadcast the daily news on weather forecast across the country through Interactive Voice Response (IVR) has been concluded recently.
Reducing Air Pollution
172. In order to reduce the level of air and industrial pollution, 11 full-time 'Air Quality Monitoring Centres' have been established to measure the level of air pollution. We have taken steps to establish energy saving and environment-friendly brick fields. Meanwhile, a total of 500 brick fields have been transformed using new technology.
Waste Management
173. The development of waste disposal management in 64 city corporations and municipalities across the country is underway with the financial support from Bangladesh Climate Change Trust Fund. As an example of our sincerity, we are formulating regulations for hazardous, ship breaking, solid and electronic waste management. Besides, a programme has been undertaken to increase the use of green fertilizers instead of chemical fertilizers. Meanwhile, Effluent Treatment Plants (ETP) has been installed in 280 industries. We have taken steps to control river pollution due to industrial waste in greater Dhaka district. A policy decision has been taken to provide soft loans to the owners of industrial units to facilitate installation of Effluent Treatment Plants (ETP) in industry premises. For this purpose, Bangladesh Bank has created a fund with an allocation of Tk. 200 crore.
Medical Waste Management
174. We want to create a disease free environment for our citizens. High temperature incinerators have already been established in ten specialized hospitals and three medical college and hospitals to dispose off medical wastes. In the next two years, another 25 district hospitals, four medical college and hospitals and three specialized hospitals will brought under the coverage of modern waste management system. Beside this, disposal pit has been installed in 206 upazila health complexes and plan is underway to install another 106 disposal pits.
Maintaining Environmental Balance
175. We have constituted the Environment Court with a view to secure a habitable environment for our posterity. We have formulated the Environment Conservation Act. We have also taken steps to prepare policies in this regard. The Department of Forest has been implementing 19 projects and 9 programmes meant for afforestation, re-plantation, maintaining biodiversity, development of eco-tourism and human resources. As many as 28 locations of the country have been declared as reserved forest areas, which represents 1.8 percent of the total area of our country. During the last three years, block gardens over 31,267 hectare of land and strip forests covering 11,445 kilometre of land have been created. In addition, raising as many as 256.57 lakh of plants has been completed. In FY2012-13, a target has been set to create block garden over 15,000 hectare of land and strip forests covering 4,500 kilometres. It also includes raising of 22.94 lakh plants against the target of 80 lakh. For proper management of various programmes in environmentally vulnerable areas, appropriate regulations have been finalised.
Preserving Biodiversity
176. Bangladesh is rich in biodiversity. In order to preserve the invaluable biological resources of the country, we have already formulated the 'National Action Plan, 2020.' Under this plan, we have also worked out the 'National Bio-Safety Framework' and its implementation is in progress. We have been working on formulating separate legal framework to ensure biodiversity and safety. Besides, actions are underway in the costal areas and wetlands like Cox's Bazar, St. Martin's Islands and Hakaluki haor to preserve biodiversity, enable its effective management and sustained utilisation.
177. Bangladesh is extremely concerned about the protection and development of environment. Therefore, this issue has become central to our overall planning process. Different ministries like Ministry of Forest and Environment, Ministry of Agriculture, Ministry of Fisheries and Livestock, Ministry of Local Government, Rural Development and Cooperatives, Ministry of Power, Energy and Mineral Resources and Ministry of Land have their own environment agenda. Our aim is to prepare an integrated master plan encompassing all the environment related projects of different ministries to be implemented under a comprehensive programme on environment and climate change. I hope this master plan will be prepared by next year and the development partners will come forward with support.
(VII) Digital Bangladesh
Mr. Speaker
178. The entire nation has shown solidarity with the Hon'ble Prime Minister's dream of establishing a 'Digital Bangladesh'. To fulfill this dream, we are attaching equal importance to establishing e-Governance including e-Services, e-Education and e-Commerce. We have established a new ministry namely 'Ministry of Information and Communication Technology'. ICT will be the principal means of transforming Bangladesh into a middle income country by 2021. 
Information Technology Services
e-Service for Marginal People
179. The Hon'ble prime Minister has been honoured with the South-South Award for her path breaking contribution to the improvement of the living standard of women and children through the use of ICT. Union Information and Service Centres have been established in 4,501 unions to provide information and services to people living in remote areas. People are already reaping benefits of this initiative. About 40 lakh people on a monthly basis receive services from these centres. This has enhanced transparency and accountability of field administration.
e-Governance
180. In my 2009-10 budget speech, I made a commitment to introduce e-Governance  by 2014. All ministries/divisions, directorates and departments have established their own websites which they update regularly. As committed, E-Tendering and e-GP (Electronic Government Procurement) have been introduced in government offices on a pilot basis. Now, people can easily access all government gazettes, necessary forms, circulars/rules and other government publications through internet. Side by side, initiatives have been taken to create national e-Governance architecture under the A2I programme to develop appropriate information management framework at national level.
e-Commerce
181. We pledged to commence e-Commerce by 2012. We have completed all the preparations for introducing electronic/digital signature necessary for secured exchange of online information. Office of the Controller of Certifying Authority has also been established for issuance of electronic certificates. Besides, we have taken effective steps to establish e-Payment gateway leading to introduction of e-Commerce. Hopefully, we will be able to achieve this target.
Postal e-Centre
182. Cash card and mobile money order services have been introduced in the country by using postal services. Steps have been taken to convert 8,000 village post offices and 500 upazila post offices into 'e-Centres'.
Development of e-Services
183. We have formulated the National ICT Policy to develop and expand information technology related services. Under this policy, as many as 306 action items are being implemented over short, medium and long term. We have reduced the telephone and internet call charges significantly. As a result, the quality and coverage of these services are increasing rapidly. The number of telephone users has increased to about 8.8 crore. At present, tele-density in the country is 61 percent and internet density is 21.3 percent. An initiative has been taken to enhance the submarine cable bandwidth capacity from 44.6 to 160 Gbps (Gigabit per second). The charge for bandwidth usage has been reduced to one third. Although, Bangla ranks 6th amongst the world languages in terms of population, the size of the Bangla web content is only 0.5 percent.  We plan to increase the use of Bangla on the web. To this end, all district information windows, websites and national e-Database have been developed in Bangla. In order to increase e-Literacy, as many as 40,000 officers/staff of district and upazila level have received training. Around 5,000 portals have been established at district, upazila and union levels. In addition, by June 2013, multimedia class rooms will be installed in 20,500 educational institutions across the country.
Expansion of Internet and Telecom Services
184. In order to get connected with the 2nd submarine cable, Bangladesh has joined the SEA- ME-WE-5 consortium. Two companies have been awarded with WiMAX (Worldwide Interoperability Microwave Access) licenses to take broadband facility to the village level. 7 Divisional towns, 46 districts and 36 upazilas have been brought under optical fibre network. Installation of this network in 1000 unions is also underway. Up to now, 400 upazilas including 25 inaccessible hilly upazilas have been brought under Teletalk network. 448 upazilas will hopefully be brought under Teletalk network by June, 2012. Currently, installation of 3G technology and extension of existing 2.5G network through Teletalk is in progress.
Digital Infrastructure
Telecommunication Infrastructure
185. Six private organizations have been awarded with ITC (International Terrestrial Cables) licenses to make international telecommunication interminable. All necessary formalities have been completed by another 22, 18 and 33 organizations to receive IGW (International Gateway), ICX (International Exchange) and IIG (International Internet Gateway) licenses, respectively. Out of 482 Upazilas in the country, digital telephone exchange has been established in 455 Upazilas. By June 30, 2012, new digital exchanges will be established in 20 out of 22 Upazilas of 3 hill-districts. Apart from this, all the Upazilas across the country has been brought under mobile internet network.
Regional Information Highway
186. A 'Central Information Centre' has been established in Bangladesh Computer Council. Bangladesh National Data Center has been internationally recognized as a data centre containing three layers of security. We have taken steps to build nationwide regional information highway. Hopefully, installation of 55 kilometer long optical fibre cable from Panchaghar to Banglabandha will be completed by June 2013. Information highway infrastructure to connect with India, Nepal, and Bhutan will be built. Besides, an initiative has been been taken to construct 'National E-governance Architecture' under the programme of 'Support to Digital Bangladesh' with a view to establishing the targeted framework of information management at the national level.
Technology Park
187. Building a Hi-Tech Park at Kaliakoir, Gazipur and a software technology park at Janata Tower to create a world class investment environment for promoting Hi-Tech industry are in progress. ICT Incubator programme is ongoing and steps have been taken to establish technology parks in all divisional towns including Dhaka.
Recognition as an Outsourcing Destination
188. Because of our sincere efforts, Bangladesh has recently been branded by the international ICT community as an outsourcing destination. Through outsourcing, employment has been generated for about 10,000 youth having ICT experience. They have earned approximately US$ 10 million. Income of the software industry has increased from US$ 35 million of previous year to US$ 46 million in FY2010-11.
Producing Expert Professionals
189. I expressed my optimism that each year 4,000 computer engineers and scientists will be produced in the country. Presently, as many as 5,000 computer engineers and scientists are graduating each year from different institutions. Steps have been taken for manufacturing and marketing of mobile phones and laptops in the local market. Commercial production of optical fibre cable has also been started.
190. Along with the budget documents of last year, I placed before this august House a booklet titled 'Progressing Towards Digital Bangladesh'. This year, I am presenting an updated version of that booklet. This will apprise the nation of our various programmes, their progress and future plans. After a while, I would present a brief statement on the issues of land management digitization as outlined in this booklet.
Chapter VII
Public Welfare
Poverty Alleviation and Social Security
Mr. Speaker
Social Empowerment
191. I mentioned at the outset of the budget speech like the previous budget speeches - we are striving to build a happy, prosperous and caring Bangladesh free from hunger and poverty. This is my as well as our Government's ambition and now it has become an aspiration of the whole nation. To this end, we have been working relentlessly, have formulated policies accordingly, allocated resources to relevant programmes and continued this trend in the next year too. As part of comprehensive efforts, we put emphasis on infrastructure as well as human resources sector. Special importance was attached to digitising the country. At the same time, our efforts to reduce regional disparity remained uninterrupted. We have continuously striving to lift all the people out of poverty who is living below the poverty line. Along with ensuring their social security, we want to empower this destitute population as well. Our aim is to enhance their strengths and capacity so that they can free themselves from the shackles of poverty.
192. Incidence of poverty and disparity has been reduced and wage of labour has increased as a consequence of our different social security and social empowerment interventions. According to 'Household Income and Expenditure Survey 2010', poverty head count ratio has reduced from earlier 41.0 percent to 31.5 percent. Already, we have brought 30.1 percent of rural and about 25.3 percent of all the families of the country under the coverage of social safety net programmes.
Citizen Core Data Structure
193. At the same time, according to our earlier commitments, we have taken steps to ensure proper use of public money by avoiding duplication of social safety net programmes. In this connection, the citizen core data structure has been finalised. Steps have been taken to form national population register and database for the hardcore poor. The scope of micro credit schemes has been widened. Besides, as indicated in our earlier commitment in the previous budget, a 'Pension Insurance Scheme' is being piloted in the sadar upazila of Nilphamari district.  
Different Types of Allowances
194. Now, I am highlighting the scope of various allowance schemes and allocation for this sector in FY2012-13:
† I propose to allocate Tk. 360 crore as insolvent freedom fighters allowance for 1,50,000 beneficiaries
† The number of beneficiary for Maternity Allowance was 60,000 in FY2008-09. I propose to raise the number to 1,01,200 and allocate Tk. 42.50 lakh for them in FY2012-13 
† As many as 77,600 working mothers of 61 district headquarters and female RMG workers of Dhaka, Narayanganj and Gazipur are receiving Poor Lactating Mothers' allowance at the rate of Tk. 350 per month. I propose to include another 78,000 mothers under this programme in FY2012-13
† I propose to allocate Tk. 891 crore for 24,75,000 beneficiaries of Old Age allowance
† I propose to allocate Tk. 331.20 crore for 9,20,000 widows and divorced/abandoned women receiving allowance at the rate of Tk. 300 per month
† As many as 7,50,000 women are receiving monthly 30 kg of food grains, in total 2,71,000 MT under VGD progarmme. I propose to continue this programme in the next fiscal year
† I propose to increase the number of VGF cards from 3.11 crore to 3.42 crore
† I propose to allocate a total of Tk. 14.61 crore for the backward Dalit, Harijon, gypsy and eunuch communities.
Welfare of Orphans
195. The monthly per head subsistence allowance for children of public orphanages has been increased

 Protecting local industries, ensuring revenue growth stressed

from Tk. 500 to Tk. 2000. I propose to allocate Tk. 28.50 crore to this sector in FY2012-13. Moreover, I propose to allocate a total of Tk. 66 crore for children of private orphanages where each child will receive Tk. 1,000 monthly.
Survey on the Physically and Mentally Challenged
196. The present Government is committed to ensure overall development of the physically and mentally challenged community. We believe, in order for mainstreaming them, this neglected section of the society should be brought under the social safety net coverage. For this purpose, initially we need accurate data on the disabled and autistic population. We have undertaken a survey to this end. Now, budget allocation in the form of financial support for education of the disabled people is provided under the Ministry of Social Welfare. This allocation will continue to be made against this ministry. However, responsibility of programme administration will lie with the Ministry of Education.
Autism
197. According to available statistics, the total number of autistic children is about 1.5 lakh. An 'Autism Resource Centre' has been established in Mirpur, Dhaka to create social awareness on autism. Presently, the construction work for building a park at the premises of 'Autism Resource Centre' is in progress. Moreover, the guardians of autistic children are receiving training on a regular basis. We have opened a full free autistic school in 2011. Its coverage will be further expanded, InshAllah.
Welfare of the Physically and Mentally Challenged
198. Around 20,000 physically and mentally challenged persons have received medical treatment from mobile 'One Stop Physiotherapy Unit' established in different parts of the country. We have established 35 'Disabled Service and Assistance Centres' in 34 districts. I am proposing to establish 30 more centres in the next fiscal year. Besides, the disabled students are receiving stipends. I propose to allocate Tk. 170 crore in FY2012-13 for different schemes undertaken for the welfare of the disabled population.
Rehabilitation of Beggars
199. I announced in my previous budget speech that we would take initiatives to eradicate begging as a profession. Accordingly, a survey has already been conducted on 10,000 beggars in the Dhaka city. Among them, 2,000 beggars are going to be rehabilitated in Mymensingh, Barisal, Dhaka and Jamalpur districts. I propose to allocate Tk. 10 crore in this sector for FY2012-13.
Rehabilitation of Hardcore Poor
200. With a view to alleviating poverty, the project titled

Continuing incentive to Capital Market
261. The present government is firmly committed to expand and strengthen the capital market along with maintaining its stability. Keeping last year's incentives provided for development of the capital market intact, I propose to provide some new incentives. To this end, I propose to reduce the income tax rate of merchant banks from 42.5 to 37.5 percent. Alongside, if any company transfers 20 percent of it's paid up capital through Initial Public Offering (IPO) to capital market, it will enjoy 10 percent tax rebate on its payable tax in the relevant year. Moreover, dividend income amounting to Tk. 5000 will be exempted from tax.
Financial Discipline 
262. One of the prime objectives of the present Government is to bring discipline and enhance transparency in transactions of trade, commerce and financial sector of the country. In this context, it is important to encourage transactions through banking channels and discourage cash transactions. For this, I propose to include necessary provisions in the income tax law to encourage carrying out of business transactions through banking channels. If implemented, it would reduce the risk of carrying cash on one hand and enhance transparency and discipline in the financial sector on the other. Subsequently, this will have positive impact on tax collection. The new system is presented in Table-2 shown below: 
Transfer Pricing and Tax Evasion
263. Globalization and gradual advancement in Information Technology (IT) offer both prospects and challenges. This has contributed to unprecedented expansion of trade and commerce on one hand and opened up new scope for tax evasion on the other hand. I propose to introduce necessary amendments in the Income Tax law to prevent the scope of tax evasion through transfer pricing in the pretext of trade liberalization and IT advancement. However, to ensure effective enforcement of this system, enhancement of technical capacity of revenue administration and trained manpower is essential. Necessary measures will be taken to impart training to revenue officers on transfer pricing and improve revenue administration's own database. 
Product Diversification in Agriculture and Incentive to Industrial Raw Materials Production
264. Providing incentives for production of high yielding agricultural products used as industrial raw materials is essential. This also helps diversify agricultural production. To this end, I propose 50 percent exemption of tax on the income derived from production of maze and sugar beet. Besides, considering their location, I propose to allow tax holiday for 5 and 7 years to industries that produce cholesterol free rice bran oil from husk of paddy.
Tax Holiday and EPZ
265. In the existing system, industries established in the Government EPZ (Export Processing Zone) may enjoy tax holiday. One of the objectives of the present Government is to ensure balanced development and industrialization by encouraging both public and private initiatives. To this end, I propose to extend uniform tax holiday facilities to all industries established both in public and private EPZs. 
266. To preserve and promote our cultural heritage, I propose to allow tax holiday facilities for construction of cinema halls and Cineplex for 5 and 7 years considering the location of establishments. I also propose to provide them with other tax incentives.
Prime Minister's Education Assistance Trust Fund
267. I have already mentioned about our Hon'ble Prime Minister's noble initiative to provide assistance to poor students to have access to education. To this end, I propose to allow tax exemption for donations to the fund created under the Prime Minister's Education Assistance Trust Fund Act, 2011. The details of the proposal are given below:

To consider donations to the fund created under the Prime Minister's Education Assistance Trust Fund Act, 2011 as taxpayer's expenses subject to a ceiling. No tax shall be payable on such donation. Company assessee may donate a maximum amount of Tk. 08 (eight) crore or 20% of its income, whichever is less.  Individual assessee may donate a maximum amount of Tk. 01(one) crore or 20% of his/her income, whichever is less.

Expansion of Source Tax and Rationalization of Tax-Rate Deducted at Source in Export and others
268. It is important to encourage export trade to reduce trade deficit and increase domestic production. It is to be noted that I have already proposed diversification of exports and continuation of export trade incentives. It is also essential to collect taxes from exports for the interest of the country. Side by side, we need to prepare a level-playing field for promoting exports by imposing taxes on all kinds of export trade equally. To this end, I propose to make a provision for deducting tax at source at a uniform rate i.e. 1.2 percent from all kinds of exports. At the same time, I also propose to update and rationalize the rate of deduction of taxes at source in all other sectors. It has been made clear in Table-3 below:

1 To impose a uniform rate of tax of 1.20 percent deducted at source on all kinds of exports in place of existing rates of 0.60 percent and 0.70 percent. 
2 To increase the rate of tax on privately owned car, jeep and microbus to be deducted at source at the time of renewal of its registration and fitness. To rationalize the rate of presumptive tax on public transport including bus, truck and prime mover etc.
3 To deduct tax at source at the rate of 1 percent on the total amount received by International Gateway (IGW) Services and 5 percent on the amount paid by IGW to other operators in regard to international telephone calls.
4 To deduct tax at source at the rate of 5 percent and 3 percent considering the location of property at the time of selling land by any land developer company.
5 To deduct tax at source at the rate of 2 percent on the post-paid mobile phone bill and on the amount to be recharged or on prepaid card amount.

Finance minister urges all to help in implementing the target

Following is the text of the National Budget Speech of Finance Minister AMA Muhith

Strengthening Audit
269. Submission of tax returns under Universal Self-Assessment scheme is one of the initiatives of the present Government to modernize the tax system. This scheme allows a taxpayer to assess his own income and tax thereon and submit his return which is treated as final. However, steps are underway to strengthen the audit system and prepare a 'Risk-based Revenue Audit Manual' to prevent taxpayers from abusing the scheme. This initiative will help maintain check and balance in taxation, inspire the responsible taxpayers and accelerate the tax collection process.
Mr. Speaker
Strengthening Tax Refund System
270. There is hardly any instance of taxpayer being refunded the money which he paid in excess of the amount due to him. The present Government is taking steps to resolve this issue. Effective measures have been taken so that the taxpayer can receive the refund of excess tax paid sitting home. Taxpayers would soon be able to reap the benefit of this initiative.
Reforms in Tax Administration and Modernization
271. The present Government has taken a number of steps including the expansion of tax administration and its modernization to put in place a time-befitting and service-oriented tax system. To keep pace with the technological progress, electronic payment of taxes has been introduced recently. In the meantime, online submission of tax return has been introduced in 02(two) tax zones and by the next fiscal year, most of the tax zones of the country are expected to be brought under this scheme. Among other initiatives by the present Government to add momentum to the tax management, Management Information System for Taxation (MIST) and Central Processing Unit has been made functional in order to get connected to the Central Web Portal by the next fiscal year. Besides generating other benefits, this measure would facilitate the taxpayers to submit TIN applications online. In addition, efforts are underway to decentralize tax administration up to Upazilla level to provide services to the taxpayers. It is undeniable that the implementation of any noble venture requires the efforts of honest, skilled and diligent manpower as well as ensuring proper incentives for them. Appropriate steps are being taken in this regard.
Indirect Taxes
Value Added Tax (VAT) 
Mr. Speaker
272. We collect four types of indirect taxes namely, (1) Value Added Tax (VAT), (2) Supplementary Duty, (3) Import Duty, and (4) Export Duty. Import and Export Duties are solely imposed on foreign trade merchandise. Supplementary Duty is imposed on both imports and domestic production. Previously, most of the revenues were used to be collected from import duty. At present, the contribution of import duty has gone down to one-third of the total revenue.
Protecting interest of the Taxpayers
273. Currently, domestic Value Added Tax is the single highest source of government revenue. Revenue collection keeps growing as expected as an outcome of the multifaceted reform interventions made by our Government in the last three and half years, positive change in the mindset of the taxpayers and consumers in respect of tax payment and the sincerity of the revenue department officials. This domestic source of revenue has high growth potential in the context of our growing economy. Our proposals have been prepared on the basis of the growth potential of local value added tax, the prospect of economic growth and interests of business and consumer communities. In order to make the existing Value Added Tax Act, 1991 time-befitting and compliance-friendly for taxpayers and consumers, the present government in consultation with the business community and other concerned stakeholders, have substantially reformed the Act over the last three years since assumption of office. In continuation of the reform process, this year in the same manner, we have taken initiatives to bring necessary changes in the scope, rates, bases, rules and procedures of existing taxes to protect the interests of the small taxpayers under the Value Added Tax Act, 1991. Now, I would like to place before this august House the following proposals.
Expansion of Turnover Tax Benefits
274. Considering the contribution made by the Small and Medium Enterprise (SME) sector and its huge potential for our economy, the present government is committed to support development of the small producers and traders of this sector by providing necessary assistance and protection. Accordingly, the government reduced the turnover tax rate from 4 percent to 3 percent on annual turnover of up to Tk. 60 (Sixty) lakh in the last budget. With a view to further supporting this sector, I place the following proposals:
(i)  Full exemption of turnover tax on annual turn over up to Tk. 7 lakh
(ii) Imposition of 2 percent turnover tax on annual turnover over Tk. 7 lakh up to Tk. 24 lakh, and
(iii) Continuation of 3 percent turnover tax on annual turnover over Tk. 24 lakh up to Tk. 60 lakh.
275. Presently, producers and traders of products like lozenge, biscuit, chanachur, shoes and sandal, coconut oil, laundry soap, jam, jelly, PVC pipe, beauty parlour have to pay VAT irrespective of their annual turnover. In order to create employment opportunities, we propose to allow small firms of these sectors having maximum turnover up to Tk. 60 (sixty) lakh to enjoy the above turnover tax facility instead of paying the existing 15 percent VAT.
Trade VAT
276. Imposition of a single rate of VAT following a single rule at all points of supply namely, import, production, service rendering, wholesale and retail sale can deliver maximum benefits to the VAT system. In the past, however, in the absence of proper accounting method of VAT, tax could not be uniformly imposed and collected at the wholesale and retail points. From the first introduction of VAT till date, trade VAT has been imposed at different rates at different points. To be specific, presently advance VAT is applicable at 3 percent on commercial imports at import stage, 2 percent at local wholesale and retail stage, 4 percent on supplies by procurement providers, 15 percent for traders paying tax on actual value addition, Tk. 100 per MT on M.S. rod and bar, and Tk. 1800 to Tk. 6000 per year for small shopkeepers depending on turnover and locations. This multiple system has created disparity among producers, traders, taxpayers, consumers as well as scope for large scale tax evasion and procedural complexities. In the interest of trade and revenue collection, this multiple VAT rates need to be changed. Considering this reality, a uniform trade VAT rate at 4 percent at all levels of wholesale and retail sales including advance VAT is proposed to abolish the existing multiple rates of VAT. However, for traders willing to pay VAT on actual value addition, a 15 percent VAT would be applicable for them along with providing input tax credit and adjustment facility on easy terms.
277. In order to rationalize, to some extent, the conflict of interests of traders, consumers and revenue due to wide disparity of existing duties and taxes between imported and domestically produced refrigerators and motor cycles, I place a few proposals. The existing tax structure at import stage of these goods will remain unchanged. However, as the demand of these goods is mostly met through import, an additional 20 percent regulatory duty that has been imposed recently is being withdrawn to keep the market price of these imported goods at a reasonable level.
278. As I mentioned earlier, we have declared a stimulus package for film industry. As part of this package, the rate of VAT is also being reduced. To protect this industry, the prevailing 35 percent supplementary duty is proposed to be withdrawn while 15 percent VAT will continue.
279. Considering the harmful effects of smoking, we are committed to reduce the use of tobacco every year. We do not provide credit for tobacco cultivation. Further, a 10 percent duty is realized on tobacco export. I propose to enhance the existing value slabs of cigarettes by 10 percent and supplementary duty from existing 36, 55, 58, and 60 percent to 39, 56, 59 and 61 percent respectively.
280. Our ceramic industry is already a developed sector and in addition to fulfilling domestic demand, this sector has been participating strongly in the global market. Considering this, the prevailing 15 percent supplementary duty on domestically produced ceramic products such as bathtub, washbasin, and commode is proposed to be fully withdrawn to protect the domestic industry.

Mr. Speaker
Tariff Value and Truncated Base
281. In order to rationalize the existing tax-bases, it is proposed to (a) increase tariff value of goods such as bricks, biscuits, cake, juice to some extent in keeping with market prices, (b) fix tariff value on tissue paper, domestically produced spectacles frame, commercial supply of newsprint, (c) reduce existing tariff value of C.R coil, G.P sheet, C.I sheet for the interests of the poor people, and (d) withdraw the existing truncated base and the related tax payment system of consultancy firm, supervisory firm, audit and accounting firm, security service, coaching centre, legal consultant, rent-a-car firm, event manager and human resource provider.
Amendment of Laws
282. In order to make the Value Added Tax Act, 1991 more comprehensible, compliance-friendly, effective against tax evasion by imposing pecuniary and other penalties according to the degree of offences, reducing the amount of fine in some cases and discretionary power of the officials, and rationalizing the provision of appeal, it is proposed to amend certain sections of this Act such as sections 37 and 55. In addition, Alternate Dispute Resolution (ADR) system has been introduced as a means of speedy disposal of disputes relating to value added tax. I propose to bring necessary amendments in relevant acts and rules to make the system more effective. Further, I place the following proposals on: (a) rules to be followed by wholesalers and retailers, (b) rules for central registration, (c) rules for VAT officials' rewards/incentives based on performance, (d) rules for rebate on tax on imported services, (e) fixing timeline at each quarter instead of every month for submission of returns for certain goods and services including exports, and (f) provision for mandatory price declaration by some of specified service sectors.
283. With a view to protecting interests of agriculture, industry, health, education and export sectors, I propose to allow VAT exemption or reduction at different transaction points of the following goods and services:

Import Duty and Supplementary Duty 
Mr. Speaker
Assistance to Local Industries
284. Against the backdrop of gradual decline of import duties, additional 5 percent regulatory duty was imposed in FY2010-11 on the commodities having highest customs duty (25 percent) with a view to protecting local industries and ensuring revenue growth. This additional regulatory duty will remain unchanged in FY2012-13. However, in most of the cases, supplementary duty is proposed to control the import of unnecessary and luxury goods.
285. To keep the price of commodities within the reach of mass people, the existing zero rate of import duty on food, fertilizer, seeds, cotton and medicine will continue in the next fiscal year.
Duty Slabs
286. Still a substantial amount of revenue is collected from import duty and supplementary duty at import stage. Existing import duty structure consists of four slabs (0%, 5%, 12% and 25%) and the slabs for supplementary duty are EIGHT (20%, 30%, 45%, 60%, 100%, 250%, 350% and 500%). I propose to add one more slab of 150 percent of supplementary duty.
Rationalization of Tariff rates
287. Changes have been made to import and supplementary duties imposed on some particular commodities. For instance, there are rebates and duty reduction on some of them and increased duties on others. The main objectives of such interventions are to protect local industries and to control price of essential commodities.

Some Proposals for Import duty, Supplementary duty and VAT for FY2012-13

288. Import and other duties have been substantially reduced from some items of public transport, information technology, medicine, ceramics and ship building industry. Import duty and VAT on edible sunflower oil has been reduced. In addition, considering the nutrition of mother and child, supplementary duty on nutritional supplement for pregnant women and lactating mothers has been reduced substantially.
289. It is notable that government has taken various steps for the development of poultry and livestock sector. In continuation of that and to meet the growing demand of milk through artificial livestock breeding, steps will be taken to have consultation with all the stakeholders concerned regarding the reduction of import duty on necessary equipment.
Duty on Importing ETP Equipment for Export Oriented Industries
290. To encourage installation of Effluent Treatment Plant (ETP) for preventing environmental pollution, the current rate of import duty is only 3 percent while it is only 1 percent in the case of export oriented industries. In addition, all duties and taxes in excess of 3 percent are waived in this fiscal year on the imported chemicals (not locally produced) required for running ETP. I propose to introduce zero percent duty instead of existing 1 percent in the coming FY2012-13 in case of importing equipment to install ETP plants for the export oriented industries.
Determining Value for New and Old Vehicles
291. 25 percent flat rate of depreciation was introduced in FY2010-11 in order to prevent fraudulent practices of declaring the used/reconditioned vehicles relatively older than actual by tampering import documents and taking advantage of previous depreciation facility. I propose to retain the current depreciation facility in the coming fiscal year along with 10 percent dealer's commission. However, according to the existing Import Policy Order, import of used/reconditioned vehicles up to five years old is allowed. This depreciation facility will be applicable for vehicles of five years old instead of existing three years. In addition, to prevent the practice of false declaration of the price of imported new cars, I propose to make rules that the value of a new car can in no way be lower than that of a used or reconditioned vehicle of same model, brand and cylinder capacity (cc) manufactured in the same country. Besides, I propose further rationalization of existing supplementary duties on vehicles import.
292. In addition, the rates of supplementary duty on vehicles for FY2012-13 are presented below: