Finance minister set to unveil Tk6.80tr budget
Staff Correspondent: Finance Minister AHM Mustafa Kamal is set to place the national budget of Tk 6.80 trillion (6.80 lakh crore) in the Jatiya Sangsad forFY2022-2023 tomorrow.
The size of the budget will be about 15 percent of the country’s gross domestic product or GDP.
This is the country’s 50th budget and the 23rd of the Awami League government in five terms. The budget will see special measures of tax exemptions on agriculture, food processing and small sector development. The revenue collection target set for NBR is Tk 4.33 trillion, an increase of 9 per cent from the revenue target of the current fiscal year and annual development program (ADP) is set at Tk2.44 trillion.
Experts emphasize on having measures to control growing inflation, stabilise foreign exchange rate and steps to ensure food security. Tajuddin Ahmed presented the first budget as the first finance minister of the post-independence Bangabandhu government in 1972.
In the upcoming budget, the target of GDP growth is set at 7.5 per cent and inflation will be kept at 5.5 per cent.
In the proposed budget, the expectation of GDP is set 7.5 percent – around Tk44.50 trillion (Tk 44 lakh 50 thousand crore, which is Tk14 trillion more than the FY22, finance division sources said.
The GDP size in FY 22 was Tk28.34 trillion or Tk 28.34 lakh crore.
The government policy makers believe in the FY23, three major infrastructures of the country will help in achieving the GDP growth despite projection of decline in global economy due to Russia-Ukraine war.
Officials concerned think that three big mega projects will be launched in FY 23. The dream Padma Bridge will be opened on June 25. This will open new doors for business and trade, which will have a positive impact on the economy.
The ministry officials said development of power, energy, communications and transport sectors will also boost growth following completion of these three mega projects.
The impact of the development of these sectors will play an important role in achieving the growth of other sectors including industry. Naturally, importance is being given to agriculture for achieving growth. Therefore, emphasis is laid on ensuring supply of agricultural inputs and maintaining subsidy. Growth is expected to be accelerated if the ongoing reforms in various sectors (revenue sector and Investment) are implemented, they said.
According to the finance division, the prices of food, fuel and fertilizer have risen sharply due to the Russia-Ukraine war. Farmers are getting it at a lower price as the government is subsidizing fertilizer. A plan has been taken to give a subsidy of Tk 12,000 crore in agriculture in the next financial year as well.
The implementation of incentive packages in the new budget will also be continued. This will add to the sector based GDP.
In this context, the former caretaker government’s finance adviser AB Mirza Azizul Islam said that if there is no growth, there will be stagnation in the economy.
“Poverty must be reduced by ensuring employment by increasing the coverage of social safety net programs,” he said.
Dr. M. MasrurReaz, economist and Chairman, Policy Exchange of Bangladesh said the budget faces challenges to keep a stable exchange rate of forex and import trade inflation.
The budget should have measured inflation as well as price control of commodities and the health sector by developing institutional capacity of government entities.
The government set an ambitious revenue collection target of Tk4.33 trillion, comfortably the highest ever, although meeting this target has never been the point.
The national board of revenue (NBR), a wing of the internal resources division (IRD), usually collects revenue for the government. The upcoming budget is set to have a Tk4.33 trillion revenue target that is Tk 44000 crore more than the target in the budget for the current fiscal and 9.8 percent of GDP.
As per the calculation, the budget deficit would stand at Tk2.44 trillion that is 5.5 per cent of GDP.
According to sources at the finance ministry, the government would borrow Tk128,341 crore from the domestic sources and Tk1,16,523crore from abroad to meet the deficit in the proposed budget.
Of the domestic borrowing, Tk 93,889 crore would be taken from the banking system while Tk 34,452 crore from savings certificates.
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