DHAKA: Bangladesh on Thursday unveiled a 2.95 trillion taka ($38 billion) budget for fiscal 2015/16, stepping up spending on key sectors to tackle power shortages that are crimping growth and deterring investment.

Spending on development needs, such as power and transport, will rise about 40 percent from the current fiscal year to 263 billion taka ($3.4 billion), Finance Minister Abul Maal Abdul Muhith told parliament, while overall spending will increase 23 percent in the year from July 1.

It is the second budget by Prime Minister Sheikh Hasina's government since her party took power for a second consecutive time by winning a violence-plagued election boycotted by the country's main opposition party.

The budget aims to boost sagging growth to 7 percent, versus 6.2 percent this year, after severe political unrest crippled the economy and left dead more than 120 people, most in petrol bomb attacks on vehicles.

Muhith urged Bangladesh's political parties to refrain from violence and cooperate in moving toward prosperity.

"Mutual tolerance and responsible behavior from all will promote democratic culture and ensure greater welfare of the people, who are toiling hard to put our economy on a firm footing," he added.

Bangladesh expects inflation to ease to 6.2 percent in 2015/16 from 7.5 percent targeted for this fiscal year.

It hopes exports and remittances from millions of its citizens working overseas will increase.

The textile industry is an important contributor to the economy, with duty-free access to Western markets having helped to make Bangladesh the world's largest apparel exporter after China.

But the industry, which supplies many Western brands such as Wal-Mart, Tesco and H&M, has faced pressure after a string of fatal factory accidents, including a 2013 building collapse that killed more than 1,130 people.