The Power Sector in the National Budget for FY2020-21

An Analysis of Allocative Priorities and Alternate Proposals

Author: Dr Khondaker Golam Moazzem and A S M Shamim Alam Shibly

The national budget for the fiscal year 2020-2021 (FY2021) is regarded as one of the most challenging Financial Bills since the Independence of Bangladesh in 1971. The National Parliament passed the Bill on 30 June, 2020 which will be effective till the next one year – 1 July, 2020 to 30 June, 2021. The implementation of the new budget will be difficult due to the squeezed fiscal space in view of COVID-19. Taking that into account, CPD (2020) and a number of research organisations put forward suggestions for reprioritisation of public expenditure and refocusing on revenue mobilisation during the new fiscal year (FY2021). Since the power sector is one of the top-ten priority sectors under the medium-term budgetary framework, it has a vital role to play in attaining the changing budgetary priorities. Unlike the national budget for earlier years where allocative priorities are set for development of generation, transmission and distribution system of the power sector, this year’s sectoral priority should be set for rationalisation of its budget allocation and contribution to overall revenue mobilisation.