Budget challenges need to overcome

Allocations for mega projects likely to increase anew

Golam Mostafa Jibon: The upcoming budget for Financial Year (FY) 2022-23 is being produced with the goal, which may be document of the next national parliamentary election for the government. Country’s people are expecting some good news in this budget with a view to overcome the situation faced in the last two years due to corona pandemic.
According to several sources, the matter is being kept in the mind in context of preparing budget so as not to have any negative impact on the lives of the people starting from general people to the businessmen.
However, there are some uncomfortable challenges for the government in the budget. It remains to be seen how bold steps will be taken to meet that challenge. The size of the budget for the next financial year will be Tk 6,79,350 crore. Compared to the current fiscal year 2021-22, the amount is about Tk 75,669 crore more. The size of the budget for the current financial year was Tk 6,3,681 crore. Like every financial year, in the next budget, the budget deficit may stand at Tk 2.5 lakh crore, which is 5.5 percent of the total GDP.
The tax-free income limit can be a matter of relief for the common man in the budget.
Compared to the current financial year, the National Board of Revenue is looking at this issue as sensitive for the next financial year. Therefore, the final decision will be taken on the basis of discussions with the Prime Minister, said an official in charge of the NBR. However, it has been hinted that the tax-free income limit may increase. This is because a meeting of the National Advisory Committee has already recommended raising the tax-free income limit. At the same time, there is a strong demand for reduction of corporate taxes. However, in the future, this issue depends on the decision of the Prime Minister.
Recently, the finance minister said that, the next budget will not bring any bad message for anyone. Everyone will be satisfied. A source close to the National Board of Revenue hinted that the tax pressure would not be too much in the next budget. Opportunities for conservation of domestic industry may be increased. Import of luxury goods will be discouraged. It will be done through the tariff structure.
The revenue estimate for the next financial year may be Tk 4,37,000 crore, which is 9.9 percent of the GDP. In the current financial year, the revenue income was Tk 3,89,000 crore. In other words, the revenue that is being taken for the next fiscal year 2022-23 is Tk 47,000 crore more than the current fiscal year. Out of the total revenue income, only Tk 3,60,000 crore will come from the Board of Revenue. The target for revenue without NBR is Tk 18,000 crore and non-tax revenue is Tk 49,000 crore. The budget deficit will never decrease as there is no balance between income and expenditure. Compared to the current financial year, the budget deficit may increase to Tk 28,260 crore in the next 2022-23 financial year. The budget deficit for the current financial year was estimated at Tk 2,14,681 crore. The budget deficit for the next financial year has been estimated at Tk 2,42,941 crore. This is 5.5 percent of GDP. However, in addition to financing from the banking system, there are plans to take long-term loans and loans from the National Savings Scheme to cover the budget deficit. Relevant sources have hinted that there will be budget support of development agencies in the next budget.
Subsidies could be a challenge in the next budget with development and non-development spending. An official in charge of the finance department said, subsidies could be the biggest challenge for the government in the next budget. It will cost a lot of money to subsidize electricity, gas, food and many more.
In the budget of the current financial year, the allocation for this subsidy sector is 12.6 percent of the total operating expenditure. The next budget may exceed this limit. For development activities, Tk 2,50,000 crore may be allocated in the Annual Development Program (ADP) of the next financial year, which is about 25,000 crore more than the ADP of the current financial year.
According to the Planning Commission, the next ADP will focus more on allocations in the agricultural sector. However, it is not that other sectors will not get more allocation. Allocations for mega projects are likely to increase anew.
Curiosity about inflation in the budget remains. In the next financial year 5.5 percent may be caught.
According to the Finance Department, the GDP growth rate is estimated at 7.5 percent. However, development partners have differing views on the rate of GDP growth. The way to do justice to the helpless people is wide in the budget. In other words, sources in the Ministry of Social Welfare have hinted that there are plans to increase the number of allowances and beneficiaries in the social security sector. According to reliable sources, the forthcoming budget, despite the news of relief, could be a challenge for the government. This includes subsidies in various sectors. At the same time to pay interest on foreign loans. However, the finance department claims that the interest payments on foreign loans will not increase much. May be like the current financial year. Responsible sources have hinted that the government has suggested for making the next budget comfortable for all.