Finance Minister AMA Muhith on Thursday proposed the biggest-ever national budget of Tk 400266 crore for the fiscal year 2017-18 with an ambitious 7.4 percent GDP growth and 5.5 percent inflation.
The cabinet earlier in a meeting at the Sangsad Bhaban, with Prime Minister Sheikh Hasina in the chair, approved the budget, which is expected to be passed on June 29.
“The budget for fiscal year 2017-18 is indeed an ambitious one,” Muhith, a veteran who placed his 11th budget at a full House, said during his speech.
The size of budget for FY18 is Tk 59,661 crore or 17.52 percent higher than the budget size of Tk 340,605 crore of the outgoing fiscal FY17.
The focal point of the proposed budget this year was emphasis on a flat VAT rate of 15 percent, a key revenue source he is banking on following the slump in remittance.
The revenue target has been set at Tk 2,87,990 crore leaving a deficit of Tk 1,12,276 crore.
Of the deficit amount, Tk 51,924 crore will be financed from external sources and Tk 60,352 crore from domestic sources. Of the domestic sources, Tk 28,203 crore is expected to come from banking system and Tk 32,149 crore from savings certificates and other non-banking sources.
The National Board of Revenue (NBR) would generate Tk.2,48,190 crore of the targeted amount. The target of Non-NBR tax revenue collection has been fixed at Tk.8,662 crore.
The excise duty on bank accounts has been increased to Tk 800 from Tk 500 for a balance of Tk 1 lakh to Tk 10 lakh.
Tk 2,41,253 crore has been allocated for non-development expenditure, including other expenses. Tk 1,53,331 crore has been earmarked for the Annual Development Programme (ADP).
Tk.10,753 crore has been allocated for projects to be implemented through self-finance of autonomous bodies. As a result, the total size of the ADP will stand at Tk 1,64,085 crore. The target for containing inflation in the next fiscal has been set at 5.5 percent.
The salaries and allowances of government servants, interest payment and subsidies will account for over half of the non-development expenditure.
In the proposed budget, 29.31 percent of the total outlay has been allocated for social infrastructure sector (of which 26.12 percent has been proposed for the human resource sub-sector) and 24.03 percent of the total allocation for the general services sector.
Besides, 1.88 percent has been allocated for public private partnership (PPP), financial assistance for various industries, subsidies and equity investment in state-owned banks, and financial institutions; 10.36 percent for interest repayment; and the rest 2.68 percent for net lending and miscellaneous expenditures.
Alongside, the amount of foreign assistance has been
estimated to be Tk. 51,924 crore.
The Finance Minister is upbeat on achieving the revenue target this time.
“I am very much confident that the NBR will achieve the revenue target for fiscal year 2017-18 by adopting modern tax policy, efficient tax management system and ensuring participation of all stakeholders including the business community,” said the finance minister.
The minister has kept the tax exemption threshold unchanged for the next fiscal year except that the threshold for person with disability will be Tk 400,000 in place of Tk 375,000.
Muhith has proposed to expand social security coverage by rising the number of recipients of old age allowance.
He has also announced special social protection scheme for Haor areas. Muhith has also highlighted 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 in various administrative and financial services in the past one year.
Muhith said the size of economy is growing day by day and by next two decades, Bangladesh will become one of the top thirty economies of the world.
Pointing to the expansion of trade and commercial activities, he said the investors expect continuity in tax policy and long term stability in such reforms.
“We will have to achieve a growth of 8 to 9 percent in order to accomplish the vision of 2041. To this end, along with capital accumulation, productivity of factors of production needs to be increased extensively,” he said.
“In tandem, the efforts to expand international trade must continue. In order to accomplish all these tasks in a planned manner, we are going to formulate the second Perspective Plan under the Vision 2041,” said the finance minister.
“The time has arrived for all to march ahead by coming together burying all differences and shunning the path of envy and violence. Let us now prepare for a prosperous, happy and peaceful Bangladesh of 2041,” he said.
Prime Minister Sheikh Hasina, Leader of the Opposition Rawshan Ershad and cabinet members were present when Muhith placed the 4th budget of Awami League government that returned to power for a second consecutive term after January 5, 2014 polls.
In line with the legal procedures, President Abdul Hamid authenticated the proposed national budget for the coming fiscal and the revised budget for the outgoing 2016-17 before the finance minister placed it before the House.
