Al Amin :
Finance Minister AHM Mustafa Kamal will place the national budget for the next fiscal year (2022-23) at Jatiya Sangsad (JS) today amid several challenges in macroeconomic front.
This will be the country’s 51st budget and the 23rd of the Awami League government in five terms. This would also be the 4th national budget in a row to be placed by Kamal.
The theme of the new budget “Returning to the way of development by overcoming the impact of Covid-19.”
The size of the budget would be Tk 6,78,064 crore which is around 15.3 per cent of the country’s gross domestic product (GDP) and Tk 74,383 crore higher than the original budget size of the outgoing fiscal year (FY22) which was Tk 6,03,681 crore. The original budget size of the outgoing fiscal year was around 17.5 per cent of GDP.
Out of the total budget size, the government is likely to earmark Tk 4,11,406 crore as operating cost including Tk 76,412 crore as the salaries and allowances of the public servants, Tk 73,175 crore as the interests of the domestic loans and Tk 7,200 crore as the interests of the foreign loans.
However, the main goal of the budget would be the capacity development in both public and private sector through increasing investment and the restoration of respite in public lives by containing inflation that continues to rise amid global commodity price hike followed by Russia-Ukraine war, finance ministry sources said.
They said special measures of tax exemptions on agriculture, food processing and SME development are likely to be kept in the new budget. The new budget is likely to set a revenue collection target of Tk 4,33,000 crore, an increase of 9.0 per cent from the revenue target of the current fiscal year.
The overall revenue collection target in the outgoing fiscal year (FY22) was earlier set at Tk 3,89,000 crore which was 11.3 percent of GDP.
In the new budget, the National Board of Revenue (NBR) would be given the task of collecting Tk 3,70,000 crore and the rest will come from non-NBR revenue and non-tax revenue.
The revenue collection target by NBR this time will be Taka 40,000 crore or 12 per cent higher.
The next budget is likely to set a target of mobilizing Tk 18,000 crore non-NBR revenue, Tk 45,000 crore non-tax revenue. It was Tk 16,000 crore and 43,000 crore respectively in the outgoing fiscal year.
Finance Ministry officials said that the deficit of the next budget would be Tk 2,45,064 crore ( 5.5 per cent of GDP) which is estimated at Tk 30,383 crore higher than the original budget deficit of Tk 2,14,681 crore in the outgoing fiscal year. The budget deficit in the outgoing fiscal year was earlier set at 6.2 per cent of GDP.
To finance the budget deficit, the government is likely to borrow Tk 1,46,335 crore from domestic sources and of which Tk 1,06,334 crore will come from the banking sector, Tk 35,000 crore from the savings certificates and the rest of Tk 5,001 crore from other sources.
Besides, the government is expecting to get Tk 95,458 crore from the foreign sources as loans and grants.
In the new budget, the government is likely to earmark Tk 82,745 crore as subsidy against various sectors which is 1.9 per cent of GDP. In the revised budget of the outgoing fiscal year, the total subsidy amount has been estimated at Tk 66,825 crore or 1.7 per cent of GDP.
The next budget is likely to set a goal of achieving 7.5 per cent the GDP growth despite persisting challenges on the economy.
Though the GDP growth target is highly ambitious, the government policy makers believe that the completion of the three major infrastructures, including Padma Bridge will help in achieving the GDP growth despite the projection of a decline in the global economy due to Russia-Ukraine war.
Besides, the development of power, energy, communications and transport sectors will also boost growth following the completion of these three mega projects, officials said.
The next budget would be projected the overall inflation rate at 5.5 per cent.
Earlier, the government approved an outlay of Tk 2,44,000 core for the annual development program (ADP) for the fiscal year 2022-23.
Experts, however, said the budget should have measures to control soaring inflation, stabilise foreign exchange rate and steps to ensure food security.
They also laid emphasis on ensuring the supply of agricultural inputs and maintaining subsidies. “Growth is expected to be accelerated if the ongoing reforms in various sectors (revenue sector and investment) are implemented,” they added.
According to the finance division, the prices of food, fuel and fertiliser have risen sharply due to the Russia-Ukraine war. Farmers are getting it at a lower price as the government is subsidisingfertiliser.
A plan has been taken to give a subsidy of Tk 120 billion in agriculture sector in the next fiscal year as well.
The implementation of the pandemic stimulus packages in the new budget will also be continued. This will add to the sector based GDP.
“The next budget should focus on poverty reduction by creating employment and increasing the coverage of social safety net programmes,” AB Mirza Azizul Islam, former finance adviser to caretaker government, told The New Nation on Wednesday.
“Besides, the budget should have specific directions for increasing capacity of the public administration, ensuing transparency and accountability for implementing the budget,” he added.
Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office, said “The next budget should chalk out measures to bring stability in forexmarket, job creation by boosting investment and containing inflation. And these would the major challenges of the new budget.”
He also said that the budget should have measure to control rising prices of essential commodities and development of the health sector by building institutional capacity of the concerned government entities.
