I am presenting the proposed Revised Budget for FY 2015-16 in the Table given below :
Stepping towards the Sustainable Development Goals
It is pleasing to note that among the Least Developed Countries Bangladesh has achieved significant progress in many MDGs. In particular, we have fully attained the targets in reducing poverty gap, poverty rates as well as the number of children suffering from malnutrition, ensuring gender parity in primary and secondary education, reducing under-five child mortality rate and preventing various diseases including HIV and tuberculosis. Besides, substantial progress has been made in ensuring primary education enrolment, reducing child and maternal mortality, expanding the coverage of immunization and preventing contagious diseases.
In continuation of the MDGs, in the 70th UN session 193 countries including Bangladesh adopted the post-2015 Sustainable Development Goals (SDGs) containing 17 goals and 169 targets.
Real GDP in the country grew consistently by around one percentage point each decade, branding Bangladesh as a ‘Development Surprise’ to rest of the world.
Agriculture and Food Security
In agriculture sector, initiatives have been taken to strengthen agriculture subsidy, provide low cost credit and high quality seeds, ensure availability of fertilizer, distribute agricultural input assistance cards, establish agricultural processing and marketing centres and diversify crops. This year Bangladesh retains the 4th position in fresh water fish production. At the same time, nutrition demand of the population is being met by ensuring growth in production of milk, meat and egg and increase in per capita availability of these products. At the beginning of 2016, storage capacity of food grains at the government level has been increased to 20.40 lakh metric tons. Along with development of food storage system, implementation of a few development projects to turn the food deficit regions into surplus ones is underway.
Power and Energy
Till May 2016, power generation capacity has increased to 14,539 MW. Per capita power generation now stands at 371 KW. Presently, 76 percent people enjoys electricity facility. We are generating 430 MW electricity from renewable energy. Moreover, 600 MW power is being imported from India.
Transport and Communication Infrastructure
Transport and communication sector is one of our top priority sectors. Construction of 2nd Kanchpur, 2nd Meghna, 2nd Gumti bridges will start soon and that of Metro Rail-6 has started. By this time, significant progress has been made in construction of the Padma bridge. A total of 156 km rail lines have been built and renovated during the current fiscal year. During this period, 12 new bridges have been constructed and 58 bridges renovated.
Information and Technology
The number of mobile and internet subscribers has increased respectively to approximately 13.20 crore and 6.20 crore by the end of April 2016. International internet bandwidth has also been raised to 180 gbs. On the other hand, up to now 5,275 digital centres have been established all over the country.
Education
As many as 1,125 new primary schools have been established in the villages having no school. We have completed the development of curriculum, publication of books and employment of teachers for pre-primary education at all government primary schools. As many as 34,895 teachers have been appointed in primary schools for this purpose. Students to school ratio has been reduced through re-construction and renovation of about 5,017 secondary schools. At the primary level, the number of stipend-recipient students has increased to 1.30 crore. On the other hand, during current fiscal year, 38.16 lakh students of class VI to graduate level have received stipend, of which 75 percent are female. The number of technical and vocational institutions has already been increased to 7,500.
Health
As many as 13,126 community clinics have been made operational till now. Provision of health care services through mobile phones has already been started in all the districts and 482 upazila hospitals. Different health care institutions have been brought under the purview of online reporting. 24-hour health counseling service at no cost through ‘health portal’ has been introduced.
Women and Child Development
With a view to increasing women participation in economic activities, creating social awareness and empowering women, we are implementing a number of programmes on imparting training on different trades, providing micro-credit, establishing hostel-cum training centres and information centres, and operating day-care centres for children. This year, we are providing allowances to 1,20,000 lactating working mothers in 64 districts and garments sector. A 12- storied hostel for garments workers has been constructed. Oppressed women are receiving services from 60 one-stop crisis management cells located at 20 upazila complexes. We are operating six child development centres at divisional level for ensuring physical and psychological development of destitute, orphan and street children.
Additionally, different programmes are in operation for child safety and security.
Child Budget
Along with women, we are giving emphasis on physical and mental development of the children. Meanwhile, we have formulated the ‘National Child Policy’ and an integrated policy for infant’s primary care and development. Last year, for the first time, we published a report titled ‘Thoughts on Child Budget’ comprising the child related activities undertaken by five ministries. This year, we are placing before the house a different report titled ‘Blooming Children: Prosperous Bangladesh’ incorporating allocations for child related activities in seven ministries/divisions. .
Environment and Climate
We are actively pursuing the issues of control of environmental pollution, afforestation and preservation of biodiversity. This year, we have finalized the draft of ‘National Environmental Policy 2016’. On the other hand, implementation of programmes to mitigate climate change risks under ‘Bangladesh Climate Change Strategy and Action Plan’ has kicked off. We have introduced modern technology in 4,000 brick fields to reduce air pollution. Effluent treatment plants (ETP) have been installed in more than 1,000 industries while installation of ETP in another 500 industries is in progress. Additionally, relocation of all leather industries to Savar after installing central ETP is underway. At the same time, construction of a park for pharmaceutical industries with central ETP facility in Munshigonj is in progress.
Supplementary Budget for Current FY 2015-16
Revised Revenue Income: In the original budget of FY 2015-16, revenue target was set at Tk. 2,08,443 crore (12.1 percent of GDP). Taking the extent of revenue collection from July to March of the current fiscal year into consideration, revenue collection target has been re-fixed at Tk. 1,77,400 crore (10.3 percent of GDP). In terms of NBR revenue, actual collection from income and profit taxes and local level Value Added Tax has been less than satisfactory. On the other hand, as for non-tax revenue, presumably BTRC revenue surplus and dividend from Bangladesh Bank will be lower than expectation.
Revised Expenditure: The total expenditure in the budget for current fiscal year was estimated at Tk. 2,95,100 crore (17.2 percent of GDP). In the revised budget, the expenditure has been estimated at Tk. 2,64,565 crore (15.3 percent of GDP) after reducing the original estimates by Tk. 30,535 crore. I propose to revise the non-development expenditure target including other expenses at Tk. 1,68,657 crore after reducing Tk. 23,884 crore. On the other hand, after, I propose to set the size of Annual Development Program (ADP) at Tk. 91,000 crore with some downward revision. The size of the revised ADP along with allocations for self-financed projects of autonomous bodies and corporations now stands at Tk. 93,895 crore (5.4 percent of GDP).
Budget Deficit: In the current fiscal year, deficit was estimated at Tk. 86,657 crore (5.0 percent of GDP). After revision, budget deficit now stands at Tk. 87,165 crore (5.0 percent of GDP). Estimates on foreign financing has been slightly reduced to Tk. 24,990 crore (1.4 percent of GDP) from original budget estimates of Tk. 30,135 crore (1.8 percent of GDP). Amount of domestic financing has been revised at Tk. 62,175 crore. Of domestic sources, bank borrowing is likely to decline riding on the potential increase in non-bank financing i.e. savings instruments sale. In fact, against current fiscal year’s target of Tk. 15,000 crore, collection from sale of savings certificate stands at Tk. 26,492 crore till April 2016.
Investment: You are aware that private investment was a bit stagnant at the beginning of this fiscal year. But recent data shows that credit flows in private sector, volume of export and import, opening and disposal of LCs for import of capital machinery, and amount of Foreign Direct Investment have increased significantly. This indicates increase in private investment. Besides, I believe, private investment is being gradually stimulated by the prevailing political and macro-economic stability along with our ongoing initiatives for the development of physical infrastructure sector including the power, energy and transport sectors.
Inflation: Till April of current fiscal year, 12-month average inflation rate stood at 6.00 percent compared to 6.6 percent over the same period of last year. Point to point inflation rate also declined to 5.6 from 6.3 percent in the last year. Inflation has declined mainly due to satisfactory agricultural production, reduction of commodity prices including fuel in the international market, prudent macroeconomic management and normal flow of supply of goods thanks to political stability. I hope inflation will likely remain within the target of 6.2 percent by the end of this fiscal year.
Money and Credit: As of March, 2016, broad money (M2) growth stood at 13.6 percent, which was a bit lower than the target stipulated in Bangladesh Bank’s Monetary Policy Statement. On the other hand, reserve money growth stood at 15.8 percent, which was slightly higher than the target. During the same period, private sector credit growth stood at 15.2 percent which exceeded the target. We are consistently laying emphasis on providing credit in agriculture sector for sustaining its growth. Agricultural credit of Tk. 16,400 crore was targeted to be disbursed during current fiscal year, of which Tk.14,128 crore, equivalent to about 86 percent of the target, was disbursed till April, 2016 compared to last year’s disbursement over the same period which was 79 percent of the target.
Interest Rates: We have been able to reduce interest rate spread as well as lending and deposit interest rates to some extent by reducing policy rates and increasing efficiency and competition in the financial sector. The interest rate spread decreased to 4.9 percent at the end March, 2016. On the other hand, deposit and lending rates have been reduced to 5.9 and 10.8 percent respectively during the same period. I believe this downward trend of lending interest rate will expedite private investment.
Imports and Exports: During July-April of current fiscal year, our export earnings stood at USD 27.6 billion, which was USD 25.3 billion during the same period of the last fiscal year. Export earnings from woven garments and knitwear recorded an increase of 12.7 and 7.3 percent respectively. Notably, among the main export markets, exports to both the USA and Euro zone have increased. On the other hand, during July-March 2016, import payments increased to around USD 31.3 billion compared to USD 29.4 billion during the same period of previous year. Opening of LCs for importing industrial raw materials and capital machinery as well as disposal of those LCs registered slight increase during this period, indicating enhanced utilization of production capacity as well as expansion of production capacity of the country.
Remittance Income: Remittance inflows stood at USD 12.3 billion in the first ten months of the current fiscal year, which is a little lower than our expectation. However, overseas employment is posting significant increase in recent months due to our diplomatic efforts coupled with various initiatives on expanding labour markets, developing capacity, and ensuring safe immigration. Hence I believe remittance inflows will gather impetus very soon.
Balance of Payments, Reserve and Exchange Rate: During the first nine months of current fiscal year, current account balance amounted to a surplus of USD 2.9 billion. Simultaneously, overall account balance registered a surplus of USD 3.5 billion due to positive capital and fiscal accounts, which, in turn, contributed to enhancing the foreign exchange reserve. As on 25 May 2016, our foreign exchange reserve stood at USD 28.6 billion which is adequate to foot import bills for seven months. Exchange rate of Tk. against US dollar has also remained fairly stable.
Growth and Inflation Target and Proposed Budget Framework
GDP Growth: You are aware that, in recent months, a number of private sector investment indicators have posted positive changes. I expect this trend to continue in the next fiscal year underpinned by our ongoing efforts in infrastructure development. In the case of public investment, both the size of ADP and its implementation rate will be stepped up. Consumption spending will also rise as public sector employees will draw their salaries including allowances as per the new pay scale. Given the positive economic prospects in export destinations, particularly in the USA and Europe, our export income will increase. Moreover, there will be an upswing in foreign remittance inflows on account of recent increase in overseas employment. Gradual fall in inflation coupled with increase in real wages and foreign remittances will boost individual consumption spending. Over and above, political stability is expected to continue. Taking all these into consideration, we have set GDP target at 7.2 percent for the next fiscal year.
Inflation: There is a likelihood that prices of commodities including oil in international market will continue to decline in the coming year also. Meanwhile, we have slightly slashed down prices of fuel for the domestic market, which is expected to reduce non-food inflation. Further downward adjustment of fuel prices is likely to continue. Side by side, prospects of persistent agricultural growth and improvement in domestic distribution system will help contain food inflation at a tolerable level. In addition, in terms of macroeconomic management, we will ensure continued harmonization of fiscal and monetary policies. In this context, I have set inflation target at 5.8 percent for the next the fiscal year.
Now, I will present the proposed revenue and expenditure scenario for FY 2016-17
Estimates of Revenue Receipts: The revenue receipts for FY 2016-17 have been estimated at Tk. 2,42,752 crore which is 12.4 percent of GDP. NBR tax revenue is estimated at Tk. 2,03,152 crore (10.4. percent of GDP). I am optimistic about significant increase in VAT collection. Besides, the ongoing reform programmes of automation, curtailing tax exemption facility, extension of tax administration, widening tax net and tax base etc. will be further strengthened. In this context, I firmly believe our revenue collection target is attainable. In the next FY, The revenue collection target from non-NBR sources has been set at Tk. 7,250 crore which is 0.4 percent of GDP. The non-tax revenue collection target has been set at Tk. 32,350 crore which is 1.6 percent of GDP. In the context of recent re-fixation of fees and rates, and strengthening of monitoring mechanism, the target is likely to be achieved.
Estimates of Total Expenditure: Total expenditure for FY 2016-17 has been estimated at Tk. 3,40,605 crore (17.4 percent of GDP). A total of Tk. 2,23,578 crore has been allocated for non-development and other expenditure (11.4 percent of GDP). The ADP size has been fixed at Tk. 1,10,700 crore (5.6 percent of GDP). Including ECA loan of Tk. 3,000 crore of power sector, the cost of self financed projects of autonomous bodies will stand at Tk. 12,646 crore. After taking this amount into account, total size of ADP will be Tk. 1,23,346 crore (6.3 percent of GDP).
Annual Development Program: Like previous years, we have estimated the ADP allocations while giving priority to ensuring regional parity, developing human resources and infrastructure and securing quality of spending with achievement of results. Sector-wise allocations of the next year’s ADP. In the ADP of FY 2016-17, I propose to allocate 24.6 percent of development outlay to the human resource sector (education, health and other related sectors), 24.5 percent to overall agricultural sector (agriculture, rural development and rural institutions, water
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Stepping towards the Sustainable Development Goals
It is pleasing to note that among the Least Developed Countries Bangladesh has achieved significant progress in many MDGs. In particular, we have fully attained the targets in reducing poverty gap, poverty rates as well as the number of children suffering from malnutrition, ensuring gender parity in primary and secondary education, reducing under-five child mortality rate and preventing various diseases including HIV and tuberculosis. Besides, substantial progress has been made in ensuring primary education enrolment, reducing child and maternal mortality, expanding the coverage of immunization and preventing contagious diseases.
In continuation of the MDGs, in the 70th UN session 193 countries including Bangladesh adopted the post-2015 Sustainable Development Goals (SDGs) containing 17 goals and 169 targets.
Real GDP in the country grew consistently by around one percentage point each decade, branding Bangladesh as a ‘Development Surprise’ to rest of the world.
Agriculture and Food Security
In agriculture sector, initiatives have been taken to strengthen agriculture subsidy, provide low cost credit and high quality seeds, ensure availability of fertilizer, distribute agricultural input assistance cards, establish agricultural processing and marketing centres and diversify crops. This year Bangladesh retains the 4th position in fresh water fish production. At the same time, nutrition demand of the population is being met by ensuring growth in production of milk, meat and egg and increase in per capita availability of these products. At the beginning of 2016, storage capacity of food grains at the government level has been increased to 20.40 lakh metric tons. Along with development of food storage system, implementation of a few development projects to turn the food deficit regions into surplus ones is underway.
Power and Energy
Till May 2016, power generation capacity has increased to 14,539 MW. Per capita power generation now stands at 371 KW. Presently, 76 percent people enjoys electricity facility. We are generating 430 MW electricity from renewable energy. Moreover, 600 MW power is being imported from India.
Transport and Communication Infrastructure
Transport and communication sector is one of our top priority sectors. Construction of 2nd Kanchpur, 2nd Meghna, 2nd Gumti bridges will start soon and that of Metro Rail-6 has started. By this time, significant progress has been made in construction of the Padma bridge. A total of 156 km rail lines have been built and renovated during the current fiscal year. During this period, 12 new bridges have been constructed and 58 bridges renovated.
Information and Technology
The number of mobile and internet subscribers has increased respectively to approximately 13.20 crore and 6.20 crore by the end of April 2016. International internet bandwidth has also been raised to 180 gbs. On the other hand, up to now 5,275 digital centres have been established all over the country.
Education
As many as 1,125 new primary schools have been established in the villages having no school. We have completed the development of curriculum, publication of books and employment of teachers for pre-primary education at all government primary schools. As many as 34,895 teachers have been appointed in primary schools for this purpose. Students to school ratio has been reduced through re-construction and renovation of about 5,017 secondary schools. At the primary level, the number of stipend-recipient students has increased to 1.30 crore. On the other hand, during current fiscal year, 38.16 lakh students of class VI to graduate level have received stipend, of which 75 percent are female. The number of technical and vocational institutions has already been increased to 7,500.
Health
As many as 13,126 community clinics have been made operational till now. Provision of health care services through mobile phones has already been started in all the districts and 482 upazila hospitals. Different health care institutions have been brought under the purview of online reporting. 24-hour health counseling service at no cost through ‘health portal’ has been introduced.
Women and Child Development
With a view to increasing women participation in economic activities, creating social awareness and empowering women, we are implementing a number of programmes on imparting training on different trades, providing micro-credit, establishing hostel-cum training centres and information centres, and operating day-care centres for children. This year, we are providing allowances to 1,20,000 lactating working mothers in 64 districts and garments sector. A 12- storied hostel for garments workers has been constructed. Oppressed women are receiving services from 60 one-stop crisis management cells located at 20 upazila complexes. We are operating six child development centres at divisional level for ensuring physical and psychological development of destitute, orphan and street children.
Additionally, different programmes are in operation for child safety and security.
Child Budget
Along with women, we are giving emphasis on physical and mental development of the children. Meanwhile, we have formulated the ‘National Child Policy’ and an integrated policy for infant’s primary care and development. Last year, for the first time, we published a report titled ‘Thoughts on Child Budget’ comprising the child related activities undertaken by five ministries. This year, we are placing before the house a different report titled ‘Blooming Children: Prosperous Bangladesh’ incorporating allocations for child related activities in seven ministries/divisions. .
Environment and Climate
We are actively pursuing the issues of control of environmental pollution, afforestation and preservation of biodiversity. This year, we have finalized the draft of ‘National Environmental Policy 2016’. On the other hand, implementation of programmes to mitigate climate change risks under ‘Bangladesh Climate Change Strategy and Action Plan’ has kicked off. We have introduced modern technology in 4,000 brick fields to reduce air pollution. Effluent treatment plants (ETP) have been installed in more than 1,000 industries while installation of ETP in another 500 industries is in progress. Additionally, relocation of all leather industries to Savar after installing central ETP is underway. At the same time, construction of a park for pharmaceutical industries with central ETP facility in Munshigonj is in progress.
Supplementary Budget for Current FY 2015-16
Revised Revenue Income: In the original budget of FY 2015-16, revenue target was set at Tk. 2,08,443 crore (12.1 percent of GDP). Taking the extent of revenue collection from July to March of the current fiscal year into consideration, revenue collection target has been re-fixed at Tk. 1,77,400 crore (10.3 percent of GDP). In terms of NBR revenue, actual collection from income and profit taxes and local level Value Added Tax has been less than satisfactory. On the other hand, as for non-tax revenue, presumably BTRC revenue surplus and dividend from Bangladesh Bank will be lower than expectation.
Revised Expenditure: The total expenditure in the budget for current fiscal year was estimated at Tk. 2,95,100 crore (17.2 percent of GDP). In the revised budget, the expenditure has been estimated at Tk. 2,64,565 crore (15.3 percent of GDP) after reducing the original estimates by Tk. 30,535 crore. I propose to revise the non-development expenditure target including other expenses at Tk. 1,68,657 crore after reducing Tk. 23,884 crore. On the other hand, after, I propose to set the size of Annual Development Program (ADP) at Tk. 91,000 crore with some downward revision. The size of the revised ADP along with allocations for self-financed projects of autonomous bodies and corporations now stands at Tk. 93,895 crore (5.4 percent of GDP).
Budget Deficit: In the current fiscal year, deficit was estimated at Tk. 86,657 crore (5.0 percent of GDP). After revision, budget deficit now stands at Tk. 87,165 crore (5.0 percent of GDP). Estimates on foreign financing has been slightly reduced to Tk. 24,990 crore (1.4 percent of GDP) from original budget estimates of Tk. 30,135 crore (1.8 percent of GDP). Amount of domestic financing has been revised at Tk. 62,175 crore. Of domestic sources, bank borrowing is likely to decline riding on the potential increase in non-bank financing i.e. savings instruments sale. In fact, against current fiscal year’s target of Tk. 15,000 crore, collection from sale of savings certificate stands at Tk. 26,492 crore till April 2016.
Investment: You are aware that private investment was a bit stagnant at the beginning of this fiscal year. But recent data shows that credit flows in private sector, volume of export and import, opening and disposal of LCs for import of capital machinery, and amount of Foreign Direct Investment have increased significantly. This indicates increase in private investment. Besides, I believe, private investment is being gradually stimulated by the prevailing political and macro-economic stability along with our ongoing initiatives for the development of physical infrastructure sector including the power, energy and transport sectors.
Inflation: Till April of current fiscal year, 12-month average inflation rate stood at 6.00 percent compared to 6.6 percent over the same period of last year. Point to point inflation rate also declined to 5.6 from 6.3 percent in the last year. Inflation has declined mainly due to satisfactory agricultural production, reduction of commodity prices including fuel in the international market, prudent macroeconomic management and normal flow of supply of goods thanks to political stability. I hope inflation will likely remain within the target of 6.2 percent by the end of this fiscal year.
Money and Credit: As of March, 2016, broad money (M2) growth stood at 13.6 percent, which was a bit lower than the target stipulated in Bangladesh Bank’s Monetary Policy Statement. On the other hand, reserve money growth stood at 15.8 percent, which was slightly higher than the target. During the same period, private sector credit growth stood at 15.2 percent which exceeded the target. We are consistently laying emphasis on providing credit in agriculture sector for sustaining its growth. Agricultural credit of Tk. 16,400 crore was targeted to be disbursed during current fiscal year, of which Tk.14,128 crore, equivalent to about 86 percent of the target, was disbursed till April, 2016 compared to last year’s disbursement over the same period which was 79 percent of the target.
Interest Rates: We have been able to reduce interest rate spread as well as lending and deposit interest rates to some extent by reducing policy rates and increasing efficiency and competition in the financial sector. The interest rate spread decreased to 4.9 percent at the end March, 2016. On the other hand, deposit and lending rates have been reduced to 5.9 and 10.8 percent respectively during the same period. I believe this downward trend of lending interest rate will expedite private investment.
Imports and Exports: During July-April of current fiscal year, our export earnings stood at USD 27.6 billion, which was USD 25.3 billion during the same period of the last fiscal year. Export earnings from woven garments and knitwear recorded an increase of 12.7 and 7.3 percent respectively. Notably, among the main export markets, exports to both the USA and Euro zone have increased. On the other hand, during July-March 2016, import payments increased to around USD 31.3 billion compared to USD 29.4 billion during the same period of previous year. Opening of LCs for importing industrial raw materials and capital machinery as well as disposal of those LCs registered slight increase during this period, indicating enhanced utilization of production capacity as well as expansion of production capacity of the country.
Remittance Income: Remittance inflows stood at USD 12.3 billion in the first ten months of the current fiscal year, which is a little lower than our expectation. However, overseas employment is posting significant increase in recent months due to our diplomatic efforts coupled with various initiatives on expanding labour markets, developing capacity, and ensuring safe immigration. Hence I believe remittance inflows will gather impetus very soon.
Balance of Payments, Reserve and Exchange Rate: During the first nine months of current fiscal year, current account balance amounted to a surplus of USD 2.9 billion. Simultaneously, overall account balance registered a surplus of USD 3.5 billion due to positive capital and fiscal accounts, which, in turn, contributed to enhancing the foreign exchange reserve. As on 25 May 2016, our foreign exchange reserve stood at USD 28.6 billion which is adequate to foot import bills for seven months. Exchange rate of Tk. against US dollar has also remained fairly stable.
Growth and Inflation Target and Proposed Budget Framework
GDP Growth: You are aware that, in recent months, a number of private sector investment indicators have posted positive changes. I expect this trend to continue in the next fiscal year underpinned by our ongoing efforts in infrastructure development. In the case of public investment, both the size of ADP and its implementation rate will be stepped up. Consumption spending will also rise as public sector employees will draw their salaries including allowances as per the new pay scale. Given the positive economic prospects in export destinations, particularly in the USA and Europe, our export income will increase. Moreover, there will be an upswing in foreign remittance inflows on account of recent increase in overseas employment. Gradual fall in inflation coupled with increase in real wages and foreign remittances will boost individual consumption spending. Over and above, political stability is expected to continue. Taking all these into consideration, we have set GDP target at 7.2 percent for the next fiscal year.
Inflation: There is a likelihood that prices of commodities including oil in international market will continue to decline in the coming year also. Meanwhile, we have slightly slashed down prices of fuel for the domestic market, which is expected to reduce non-food inflation. Further downward adjustment of fuel prices is likely to continue. Side by side, prospects of persistent agricultural growth and improvement in domestic distribution system will help contain food inflation at a tolerable level. In addition, in terms of macroeconomic management, we will ensure continued harmonization of fiscal and monetary policies. In this context, I have set inflation target at 5.8 percent for the next the fiscal year.
Now, I will present the proposed revenue and expenditure scenario for FY 2016-17
Estimates of Revenue Receipts: The revenue receipts for FY 2016-17 have been estimated at Tk. 2,42,752 crore which is 12.4 percent of GDP. NBR tax revenue is estimated at Tk. 2,03,152 crore (10.4. percent of GDP). I am optimistic about significant increase in VAT collection. Besides, the ongoing reform programmes of automation, curtailing tax exemption facility, extension of tax administration, widening tax net and tax base etc. will be further strengthened. In this context, I firmly believe our revenue collection target is attainable. In the next FY, The revenue collection target from non-NBR sources has been set at Tk. 7,250 crore which is 0.4 percent of GDP. The non-tax revenue collection target has been set at Tk. 32,350 crore which is 1.6 percent of GDP. In the context of recent re-fixation of fees and rates, and strengthening of monitoring mechanism, the target is likely to be achieved.
Estimates of Total Expenditure: Total expenditure for FY 2016-17 has been estimated at Tk. 3,40,605 crore (17.4 percent of GDP). A total of Tk. 2,23,578 crore has been allocated for non-development and other expenditure (11.4 percent of GDP). The ADP size has been fixed at Tk. 1,10,700 crore (5.6 percent of GDP). Including ECA loan of Tk. 3,000 crore of power sector, the cost of self financed projects of autonomous bodies will stand at Tk. 12,646 crore. After taking this amount into account, total size of ADP will be Tk. 1,23,346 crore (6.3 percent of GDP).
Annual Development Program: Like previous years, we have estimated the ADP allocations while giving priority to ensuring regional parity, developing human resources and infrastructure and securing quality of spending with achievement of results. Sector-wise allocations of the next year’s ADP. In the ADP of FY 2016-17, I propose to allocate 24.6 percent of development outlay to the human resource sector (education, health and other related sectors), 24.5 percent to overall agricultural sector (agriculture, rural development and rural institutions, water
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