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The communication sector, which has been a priority sector so far with the highest budget allocation, has received a 14 per cent higher allocation in the upcoming fiscal year (FY), 2025-2026, with significant decrease of allocation to rail and bridges. ADP share allocation of the sector is 8.67 per cent.
The budget for FY 2025-26 has recommended Tk 691.96 billion for road and rail sectors, which was 581.39 billion in the revised budget of FY 2024-25.
However, original budget for the sector in the current FY was Tk 804.98 billion, planned to be spent by Road Transport and Highways Division (RTHD), Bridges Division and Railways - under the ministries of road, transport and bridges and railways - for various infrastructure development works to ensure smooth transportation.
Budget allocation of Tk 384.96 billion for RTHD is supposed to be spent for projects under Roads and Highways Department, Dhaka Mass Transit Company Limited, Bangladesh Road Transport Authority, etc.
The proposed budget allocation is slightly higher than the original budget allocation of Tk 381.43 billion.
Allocation for the railway sector, including Bangladesh Railways, has been proposed with a significant reduction to Tk 119.44 billion in the upcoming FY from Tk 145.64 billion in the revised budget.
The budget for FY 2024-25 allotted Tk 180.72 billion for the rail sector's development. The percentage of the sector in the ADP allocation is only 1.51 per cent.
Bridges Division has been allotted Tk 60.22 billion, which received Tk 58.54 billion in the revised budget. The entity got Tk 73.18 billion in FY 2024-25, as it used to get the higher allocation due to mega projects like Padma Bridge and Karnaphuli Tunnel.
The upcoming budget is likely to impact on transportation and traffic congestion due to reduction of tax on below 15-seat and above 15-seat transports as well as exemption of VAT in the local manufacturing of four-stroke three-wheelers.
Transport experts said as small-sized public transports have been encouraged in the new budget, traffic congestion situation is likely to deteriorate.
They also said as the interim government has reduced fuel prices and import tax, transportation cost, including fares of different vehicles, is likely to decline in the upcoming year.
Import duties have been halved for importing above 10-seat and below 15-seat vehicles as well as above 15-seat vehicles, which are mainly microbuses and minibuses.
Currently, import tax for microbuses is 20 per cent and for minibuses 10 per cent, which would be 10 per cent and five per cent respectively.
The budget has also proposed slight reduction of the existing VAT exemption for local manufacturing of four-stroke three-wheelers, extending its period to June 30, 2030, which is likely to increase plying of three-wheelers.
Based on expected profitability, the budget has increased advanced tax rate on commercial plying of motor vehicles.
The existing exemption at the manufacturing stage of general motor cars and motor vehicles would continue, while exemption facility at the manufacturing stage of general and ICU ambulances, hybrid and electric vehicles have been granted till June 30, 2030.
smunima@yahoo.com