FE Report (June 30, 2011)
The parliament unanimously passed Wednesday the Appropriation Bill- 2011, giving the authority for spending up to Tk 2.324 trillion from Consolidated Fund in fiscal year (FY) 2011-2012, for making necessary development and non-development expenditures by the government.
Finance Minister Abul Maal Abdul Muhith placed the bill before the Jatiya Sangshad (JS) for its approval.
The JS passed earlier on Tuesday the Finance Bill-2011, with some changes as proposed by the Finance Minister to the original one that was placed before the House at the time of the presentation of the budget for fiscal 2011-12 on June 09.
With the passage of both the Appropriations Bill-2011 and the Finance Bill-2011, the national budget of Tk 1.63 trillion for fiscal 2011-2012 received the approval of the JS on Wednesday, a day before the current financial year that concludes on Thursday which is a public holiday this year on account of the holy Shab-e-Meraj.
The members of parliament from the main opposition party were absent in the House so far during the budget session of parliament this year.
Following the proposal mooted on Wednesday in the House by the Finance Ministry for parliamentary approval of appropriations of fund for making necessary development and non-development expenditures of the government in fiscal 2011-12, the ministers concerned placed justification of the expenditure by their respective ministries, through 54 demands for grant. The demands were passed by the House through voice vote.
Some 600 cut-motions were tabled in the house by the opposition members but only an independent lawmaker Fazlul Azim, from Noakhali-6 constituency, spoke on seven proposals. Later, the cut-motions were rejected by voice vote.
Under the appropriations approved Wednesday by the JS for fiscal 2011-12, defence ministry got allocation of Tk 121.22 billion, Home Ministry, Tk 77.30 billion, Primary Education, Tk 89.64 billion, Education, Tk 108.73 billion, Health, Tk 88.88 billion, Local Government and Rural Development, Tk 109.11 billion, Agriculture, Tk 74.10 billion, Food Ministry, Tk 108.30 billion, Roads and Railway, Tk 75.53 billion and Power Division, Tk 71.60 billion.
The discussions in parliament on the national budget for fiscal 2011-12 continued for about 60 hours, in all. The discussions began on June 12.
The parliament unanimously passed Tuesday the Finance Bill-2011, in cooperating tax proposals that were made for fiscal 2011-12.
Under the enacted Finance Bill 2011, undisclosed money will be allowed for investment in stock market, in addition to treasury and infrastructure bonds, at a concessional rate of tax. Registration fees for transfers of commercial buildings and tax at source of export earnings - that were earlier proposed to be raised -- have been reduced.
Agencies add: The Finance Bill-2011 that was unanimously passed by the Jatiya Sangsad included some amendments to the original tax proposals. Such amendments were brought to protect public interests. These included, among others, amendments also the withdrawal of tax on poultry industry.
The Finance Bill has also kept a provision for commencement of Alternative Dispute Resolution [ARD] for resolving income tax-related disputes.
Though several existing laws and provisions relating to tax and duties with financial involvement were amended.
Besides those amendments, there were no other major changes in the proposals that the Finance Minister Abul Maal Abdul Muhith placed in the JS on June 09.
The growth target of the national economy has been set under the national budget for fiscal 2011-12 at 7.0 per cent.
Since members of the opposition were absent in the House, their cut motions were not placed.
The parliament sat at around 11am on all working days during the budget discussions. The budget session of the JS started on May 22.
The finance minister amended his original tax proposals before the approval of the Finance Bill, 2011, in line with the suggestions made by the prime minister. Thus, undisclosed money will be allowed for investment in the stock market at a 10 per cent tax rate, in addition to treasury and infrastructure bonds. The export tax at source for the garment sector will be at to 0.6 per cent.
The budget deficit is projected at 5.0 per cent and revenue target has been set at Tk 1.18 trillion.
The domestic borrowing is estimated at Tk 270 billion while Tk 130 billion will come as external resources.
Annual average rate of inflation is projected at 7.5 per cent for fiscal 2011-12.
Since members of the opposition were absent in the House, their cut motions were not placed.
The parliament sat at around 11am on all working days during the budget discussions. The budget session of the JS started on May 22.
The finance minister amended his original tax proposals before the approval of the Finance Bill, 2011, in line with the suggestions made by the prime minister.
Thus, undisclosed money will be allowed for investment in the stock market in addition to treasury bills and infrastructure bonds, at a 10 per cent rate of tax. The export tax at source for the garment sector will be at 0.6 per cent.
The budget deficit is projected at 5.0 per cent and revenue target has been set at Tk 1.18 trillion.
The domestic borrowing for meeting the budget deficit is estimated at Tk 270 billion while Tk 130 billion will come as external resources.
Annual average rate of inflation is projected at 7.5 per cent for fiscal 2011-12.
Saturday, July 2
Bid in pry auction of govt securities ==>> BB extends exclusivity of PDs for one more quarter this year
FE Report (July 02, 2011)
The central bank has extended the exclusivity of the primary dealers (PDs) for submission of bids in the primary auction of the government securities for one more quarter this year.
"Only the PDs will be allowed to submit the bid in the primary auction of government treasury bills and bonds for July-September period of this year," an executive director of the Bangladesh Bank (BB) told the FE Friday.
The system has been introduced aiming to broaden, and bring depth to, the secondary market of government securities, the BB executive said, adding that the system may be continued further, subject to its successful implementation.
The central bank introduced the system for the first time in Bangladesh for the April-June period this year to boost the country's secondary securities market through strengthening the activities of the PDs.
Under the system, non-PD banks and financial institutions will take part in the auction only through the PDs.
The PDs welcomed the central bank's latest move, saying that it would help bring dynamism to the secondary market of the government-approved securities.
"We expect that the system will continue in the near future to facilitate the PDs' performance," a senior member of the Primary Dealers Bangladesh Limited (PDBL) told the FE.
He also said the non-PD banks and financial institutions will have to buy the securities from the PDs to meet their statutory liquidity ratio (SLR) with the central bank.
The PDBL earlier urged the central bank not to allow the non-PD banks and non-banking financial institutions (NBFIs) to participate in the primary auction of the government securities.
Currently, three treasury bills (T-bills) are being transacted through auctions to adjust the government borrowing from the banking system.
The T-bills have 91-day, 182-day and 364-day maturity periods.
On the other hand, four government bonds -- five-year, 10-year, 15-year and 20-year -- are being traded on the market.
The central bank of Bangladesh earlier selected 15 PDs -- 12 banks and three NBFIs -- to handle government-approved securities in the secondary market.
The PDs will subscribe and underwrite primary issues and make secondary trading deals with two-way price quotations.
A PD will not short-sell any particular issue and will not hold a short position in secondary dealings. The PDs will not act as inter-bank or inter-dealer brokers, which has been specified in the guideline.
The central bank has extended the exclusivity of the primary dealers (PDs) for submission of bids in the primary auction of the government securities for one more quarter this year.
"Only the PDs will be allowed to submit the bid in the primary auction of government treasury bills and bonds for July-September period of this year," an executive director of the Bangladesh Bank (BB) told the FE Friday.
The system has been introduced aiming to broaden, and bring depth to, the secondary market of government securities, the BB executive said, adding that the system may be continued further, subject to its successful implementation.
The central bank introduced the system for the first time in Bangladesh for the April-June period this year to boost the country's secondary securities market through strengthening the activities of the PDs.
Under the system, non-PD banks and financial institutions will take part in the auction only through the PDs.
The PDs welcomed the central bank's latest move, saying that it would help bring dynamism to the secondary market of the government-approved securities.
"We expect that the system will continue in the near future to facilitate the PDs' performance," a senior member of the Primary Dealers Bangladesh Limited (PDBL) told the FE.
He also said the non-PD banks and financial institutions will have to buy the securities from the PDs to meet their statutory liquidity ratio (SLR) with the central bank.
The PDBL earlier urged the central bank not to allow the non-PD banks and non-banking financial institutions (NBFIs) to participate in the primary auction of the government securities.
Currently, three treasury bills (T-bills) are being transacted through auctions to adjust the government borrowing from the banking system.
The T-bills have 91-day, 182-day and 364-day maturity periods.
On the other hand, four government bonds -- five-year, 10-year, 15-year and 20-year -- are being traded on the market.
The central bank of Bangladesh earlier selected 15 PDs -- 12 banks and three NBFIs -- to handle government-approved securities in the secondary market.
The PDs will subscribe and underwrite primary issues and make secondary trading deals with two-way price quotations.
A PD will not short-sell any particular issue and will not hold a short position in secondary dealings. The PDs will not act as inter-bank or inter-dealer brokers, which has been specified in the guideline.
26 state-run jute mills to go public ==>> 49pc stakes to be offloaded within a year
FE Report (July 02, 2011)
The government has decided to offload, at least, 49 per cent stakes of each of the 26 state-owned jute mills in the capital market soon, a top official of the ministry of jute and textiles said.
Finance Minister AMA Muhith has recently approved the move of offloading the shares of the state-owned jute mills.
According to the process approved by the finance minister, divestment must be completed within the next one year. Currently the mills are running under Bangladesh Jute Mills Corporation (BJMC).
A committee headed by Finance Secretary Dr M Tareq has made a thorough study on the overall situation in the jute mills and submitted five-point recommendations to the government including offloading 49 per cent shares of the mills.
"The offloading process is under way. The government would divest the shares within the next one year," Textiles and Jute Secretary Md Ashraful Moqbul told the FE.
The secretary also said the ministry has been working hard to make the state-run jute mills operationally sound and economically viable.
He said the government decided to turn the BJMC into a 'holding company' to protect the state-owned jute mills from incurring financial losses.
"The shares will be floated once the organisation (BJMC) turns into a holding company," Moqbul added.
As part of the offloading activities, we will immediately enlist chartered accountant (CA) firms to make the valuation of assets and liabilities of the mills under BJMC," a high official of BJMC said, preferring anonymity.
The BJMC official said, "Floating of the BJMC-run jute mills in the share market will be a big venture for the government."
"Although the initiative to float shares of state-owned jute mills is good, its implementation needs a strong political will on the part of the government," a private sector jute mills operator told the FE.
He said if the shares of the state-run jute mills are floated, it will help bring transparency and accountability to the operations of the BJMC units, thus providing the much-needed boost to the country's overall jute sector.
According to the data of BJMC a good number of loss-making mills have already been shut down over the years.
Sources, however, said like the private sector mills, the state-run units are now running better than before thanks to a substantial rise in the prices of jute and jute goods in the international market in recent years, because of an increased demand for the natural jute fibre.
"Some jute mills under the BJMC are now making profits following the government's pragmatic steps that have helped the state-owned enterprises get out of recurrent financial losses in the past few years," a BJMC official said.
The mills have earned some Tk 69.3 million profit in May 2011.
According to the statistics of the government, the mills under BJMC have counted losses worth Tk 48.21 billion (4,821.41 crore) since nationalisation up to 30th June, 2009.
The government nationalised 79 jute mills after liberation through Bangladesh Industrial Enterprises (Nationalisation) Order, 1972 (P.O.27). Later the government sold out 52 jute mills to the private entrepreneurs.
The government has decided to offload, at least, 49 per cent stakes of each of the 26 state-owned jute mills in the capital market soon, a top official of the ministry of jute and textiles said.
Finance Minister AMA Muhith has recently approved the move of offloading the shares of the state-owned jute mills.
According to the process approved by the finance minister, divestment must be completed within the next one year. Currently the mills are running under Bangladesh Jute Mills Corporation (BJMC).
A committee headed by Finance Secretary Dr M Tareq has made a thorough study on the overall situation in the jute mills and submitted five-point recommendations to the government including offloading 49 per cent shares of the mills.
"The offloading process is under way. The government would divest the shares within the next one year," Textiles and Jute Secretary Md Ashraful Moqbul told the FE.
The secretary also said the ministry has been working hard to make the state-run jute mills operationally sound and economically viable.
He said the government decided to turn the BJMC into a 'holding company' to protect the state-owned jute mills from incurring financial losses.
"The shares will be floated once the organisation (BJMC) turns into a holding company," Moqbul added.
As part of the offloading activities, we will immediately enlist chartered accountant (CA) firms to make the valuation of assets and liabilities of the mills under BJMC," a high official of BJMC said, preferring anonymity.
The BJMC official said, "Floating of the BJMC-run jute mills in the share market will be a big venture for the government."
"Although the initiative to float shares of state-owned jute mills is good, its implementation needs a strong political will on the part of the government," a private sector jute mills operator told the FE.
He said if the shares of the state-run jute mills are floated, it will help bring transparency and accountability to the operations of the BJMC units, thus providing the much-needed boost to the country's overall jute sector.
According to the data of BJMC a good number of loss-making mills have already been shut down over the years.
Sources, however, said like the private sector mills, the state-run units are now running better than before thanks to a substantial rise in the prices of jute and jute goods in the international market in recent years, because of an increased demand for the natural jute fibre.
"Some jute mills under the BJMC are now making profits following the government's pragmatic steps that have helped the state-owned enterprises get out of recurrent financial losses in the past few years," a BJMC official said.
The mills have earned some Tk 69.3 million profit in May 2011.
According to the statistics of the government, the mills under BJMC have counted losses worth Tk 48.21 billion (4,821.41 crore) since nationalisation up to 30th June, 2009.
The government nationalised 79 jute mills after liberation through Bangladesh Industrial Enterprises (Nationalisation) Order, 1972 (P.O.27). Later the government sold out 52 jute mills to the private entrepreneurs.
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