Anisul Islam Noor :
Finance Minister AMA Muhith will place his 9th consecutive budget today at the Jatiya Sangsad for the 2017-18 fiscal year, focusing mainly on speeding up the implementation of some mega infrastructure projects and boosting private investment to create more employment opportunities.
Besides, the minister said like previous years, education and health sectors will continue to get priority while the transport, power and energy sectors will get comparatively higher allocation. The target for containing inflation in the next fiscal year has been set at 5.5 percent.
The size of the next budget is around Tk 400,266 crore, the biggest-ever, targeting a 7.4 percent GDP rate.
The budget is being placed amid the business community’s concern about possible imposition of 15 percent flat VAT rate from July 1 next.
The Finance Minister will start placing the budget in the House from 1:30 pm.
Officials at the Finance Ministry said the new budget is Tk 54,665 crore or 17 percent more than the budget size of the outgoing fiscal year, while it is about Tk 83,0096 crore or 26 percent higher than the revised budget outlay of the outgoing fiscal year.
The overall budget also includes a Tk 153,331 crore Annual Development Programme (ADP) while the rest will be for the non-development expenditure.
The salaries and allowances of government servants, interest payment and subsidies will account for over half of the non-development expenditure.
The new budget will be the country’s 46th national one and the 18th of the Awami League government and Muhith’s 11th.
Muhith also placed two national budgets during HM Ershad’s regime in the early 80s.
The centre of concern over this upcoming budget is the possible imposition of flat 15 percent VAT rate, but Finance Ministry officials hinted that the VAT rate might be slashed by 1 percent at the last moment which could be finalised at the Cabinet meeting before placing of the budget.
Towards implementing the huge budget, the mammoth challenge for the Finance Minister will be to look for additional revenue to meet the budget expenditures.
For this, the minister will rely on expanding the scope of VAT, an indirect form of taxation that has direct impact on the life and livelihood of every consumer.
Traders, businesspeople and the common people are equally worried about the possible aftermath of imposing a 15 percent flat value added tax for all.
To remove the VAT fear, Muhith as well as NBR officials said they will exempt many products used by the poorer section of people from the VAT net.
The Finance Minister also made an assurance that they identified several goods for imposing supplementary duty on so that the local industries are not affected.
At the moment, out of 8 lakh business firms, only 32,000 pay VAT. The government plans to increase the number to 50,000.
Officials said the overall revenue collection target for the next fiscal year is likely to be set at Tk 288,066 crore of which Tk 248,000 crore is likely to come from the NBR sources.
They also said to generate more employment opportunities through raising investments, the next budget is likely to see more expenditures for which the overall budget deficit will be around Tk 112,266 crore, over 5 percent of GDP.
Out of the original ADP allocation of Tk 153,331 crore in the next fiscal year, Tk 96,331 crore will come from the local sources while the rest Tk 57,000 crore from the foreign sources.
The next budget may witness a Tk 2,000 crore allocation against the Public Private Partnership (PPP) initiatives to encourage more private sector investments and participation side by side larger allocations will be there in the priority fast track projects to further expedite the pace of GDP growth.
Out of Tk 153,331 crore ADP outlay slated for the fiscal year 2017-18, a hefty Tk 30,614 crore is set aside for the six fast-track projects — Padma Bridge, Padma Rail Link, Metro Rail, Dohazari-Cox’s Bazar-Gundum Rail Project, Matarbari Coal-fired Power Plant and Rooppur Nuclear Power Plant.
The tax-free income is also expected to go up slightly. But, wealth surcharge is being increased in every ceiling as the Finance Minister has already hinted at his plan to tax the rich more.
In his budget speech, Muhith will highlight the present government’s successes in meeting the energy crisis when GDP growth met target, inflation was also kept under control, and the country saw significant improvement of various administrative and financial services in the past one year, thanks to digitisation programme and political stability.
