Bangladeshi Finance Minister Saifur Rahman has announced big increases in spending on education and information technology.

Presenting the 2002-03 budget to MPs, Mr Rahman estimated total outlay at 450bn taka ($8.15bn), a 13% increase in expenditure on the current financial year.

I propose to reduce corporate tax rate of listed companies to 30% from 35%, and for others to 35% from 40%

Saifur Rahman, finance minister

He said his budget was aimed at achieving faster economic growth and at reducing poverty.

Top priority was given to education and the IT sector, which will receive 15% of the total budget.

Spending on defence went up too, and will account for 39bn taka, or 8.8% of revenue income.

"The present government is committed to modernise and improve the efficiency of our defence forces," the minister said.

Transport, communications, local government, agriculture and health account for a signicant proportion of remaining expenditure.

The budget will carry an overall deficit of 117.7bn taka.

Tax cuts

Mr Rahman said the government was determined to extricate itself from the grip of external dependence.

Big increases on defence

He said Bangladesh could substantially increase revenue earning by expanding the tax base without raising tax rates.

"I propose to reduce corporate tax rate of listed companies to 30% from 35%, and for others to 35% from 40%," he said.

Corporate tax for bank, insurance and financial institutions, however, is to remain at 40%.

Mr Rahman admitted that, against a backdrop of declining foreign aid, Bangladesh was under pressure to generate more resources at home to meet its development expenditures.

The proposed budget foresees 14% of funding coming from foreign financing.