Bangladesh parliament approves 2006/07 budget

DHAKA, Jun 29 (Reuters) Bangladesh's parliament adopted today a more than 10 billion dollars annual budget for the year to next June, approving a 14 percent rise in spending over to the current year.

Finance Minister M Saifur Rahman said the major focus of the new budget was on poverty alleviation, education, health, agriculture and human resources development.

Opposition parties differed, saying the budget was aimed to ''win votes'' for Saifur's Bangladesh Nationalist Party (BNP) in the next parliamentary election due in January 2007.

Opposition lawmakers walked out of parliament in protest against the budget.

The 2006/07 (July-June) budget includes a robust revenue target -- a 17 per cent rise over the current year to 525.42 billion taka (US7.5 billion dollars).

Saifur did not impose any new taxes for 2006/07, saying he aimed to boost revenue through better management. But he slashed duties on many imported essentials, including sugar and lentils.

He said 260 billion taka of the budget will go to development. Some 57 percent of the development funds will come from domestic resources and 43 per cent through foreign aid.

He forecast a 7 percent growth of gross domestic product (GDP) in 2006/07, against 6.7 per cent in 2005/06.

Saifur told parliament that only 12 percent of the funding for the budget would come from international aid donors, reflecting the government's growing capacity to finance its spending.

The finance minister said a key focus of the proposed budget was to reduce poverty, which still grips nearly half of the country's 140 million people, who live on less than a dollar a day.

Saifur said some 2.2 million people would be brought into an old-age allowance scheme within the next two years.

He defended a recent increase in fuel prices, more than 22 percent on average, saying the rise was low compared to other countries.

REUTERS CH HT1915