Size of revised budget stood at Tk 47,367 cr

Mahfuja Mukul : The government announced an ambitious budget of Tk 761,785 crore for the current financial year. However, due to financial crisis, this time its size has been reduced to Tk 47,367 crores. Along with operating expenses, development expenses have also been cut. Excluded is the allocation of the retained amount for the project. At this challenging time of the macro economy of the country, the analysts, however, have suggested to draw more rush in the government expenditure as well as to formulate a realistic budget in the next financial year.
The Finance Department of the Ministry of Finance has recently finalized the revised budget allocation for the current financial year 2023-24. It can be seen that excluding domestic and foreign debt repayment and adjustment, the total operating expenditure of the government will be Tk 4 lakh 54 thousand 410 crores. In the original budget which was Tk 4 lakh 84 thousand 202 crores. In this case, operating expenses have decreased by Tk 29 thousand 792 crores or 6.15 percent. In the revised budget, the total development expenditure has been fixed at Tk 2 lakh 60 thousand 6 crore, whereas in the original budget it was Tk 2 lakh 77 thousand 582 crore. Accordingly, the expenditure has decreased by Tk 17 thousand 576 crore or 6.33 percent. In all, the size of the revised budget for the current financial year stands at Tk 7 lakh 14 thousand 417 crores, while the size of the original budget was Tk 7 lakh 61 thousand 785 crores. In this case, the size of the budget has decreased by 6.23 percent.
Executive Director of South Asian Network on Economic Modeling (SANEM) and Professor of Economics Department of Dhaka University Salim Raihan told, “When the budget was announced last year, it seemed ambitious. Considering the situation, the budget was too big and it was assumed that it would not be possible to implement it. Every year the same situation is seen, the revised budget falls short of the announced budget and the actual budget is even lower. But the target of revenue collection will not be met. On the other hand, there are also problems in terms of financing. Inflation will increase due to which financing by printing money is not possible. As a result, spending will be cut in sectors like health, education and social security, where more should be spent.
He said, “We said during the formulation of the budget, its objective should be to consolidate the economy and bring some kind of stability. Especially when there are major pressures on the macroeconomics. Instead of keeping an eye on that, an ambitious budget was given, where things like major investments seemed unrealistic. It is not possible to implement them in this financial year. The budget implementation rate is also very weak.
Meanwhile, a notification has recently been issued by the Finance Department requesting not to accept any expenditure bill in excess of the revised allocation against each sector. It has been said that additional expenditure can be incurred only in the sectors where additional allocation will be given from the finance department. No consent of Finance Department and Administrative Ministry or Department shall be required for exemption of Government (GOB) share allocation in respect of approved projects under implementation. This amount will automatically be treated as rebate and project managers can use it directly. However, the existing procedure of release and utilization guidelines for development projects issued by the finance department for release of funds in the case of projects of autonomous institutions including revised unauthorized projects will remain unchanged.
The notification also said that in cases where the amount of the original sanction is more than the revised allocation and, in the meantime, more money has been exempted or used than the revised allocation, the amount of money that has been exempted or used more than the revised allocation should be immediately surrendered or deposited in the government treasury. The money deposit has been asked to be reported to the finance department by the second week of June this year through a letter.
Prof. expressed the expectation that the budget of the next financial year will be realistic. Salim Raihan said, “The budget should contain the guidelines to deal with the challenges of the economy. There is scope for cuts in many areas of government spending. Many unnecessary costs can be reduced. It is good news that bulk allocation has been omitted in the revised budget. It was an opaque process in the budget. There will be hope that ambitious projects that can be implemented later rather than now will be reflected in the next budget.
In the first six months, 25.52 percent of the target of spending in the main budget of the current financial year has been spent. During this time the total expenditure was Tk 1 lakh 94 thousand 444 crores. Out of this, Tk 1 lakh 50 thousand 766 crore have been spent in the management sector and Tk 43,677 crore in the development sector.
The National Board of Revenue (NBR) has set a target of Tk 430,000 crore in revenue collection in the current financial year. Although it has been revised to Tk 4 lakh 10 thousand crores. In the first eight months of the current financial year (July-February), a revenue of Tk 2 lakh 24 thousand 715 crore has been collected. At that time the target was Tk 2 lakh 44 thousand 808 crores. Compared to the same period of last financial year, the revenue collection has increased by 14.63 percent.
This time the allocation of the Annual Development Program (ADP) had to be cut due to the inability to spend the money allocated by the Ministry. As a result, the size of revised ADP or RADP for the current financial year stands at Tk 2 lakh 54 thousand 391 crores. Earlier, the size of the main ADP was Tk 2 lakh 74 thousand 674 crore, whereas the wholesale allocation was Tk 11,314 crore. Bulk allocation has been omitted in the revised ADP.
Policy Research Institute of Bangladesh (PRI) executive director Dr. Ahsan H Mansoor told, “The amount of budget reduction is realistic, but not enough.” It should have been reduced by at least Tk 1 lakh crore. The revised revenue collection target of NBR will also not be achieved. If we take into account the growth in revenue collection up to February of the current financial year, there will be a deficit of 30 thousand crore rupees. This will increase the tension of the government with financing. Although the size of the budget has been reduced by Tk 47 thousand crores, due to the revenue deficit of Tk 30 thousand crores, the budget size will actually be reduced by Tk 17 thousand crores. In the current financial year, the government has a target of collecting Tk 1 lakh 55 thousand crores from local sources, a major part of which is yet to be taken. Besides, there will be a large shortfall in foreign borrowing compared to the target. This will increase the demand to collect money from local sources. If the government collects money through treasury bills to meet this deficit, the pressure on the currency market will increase and the interest rate on treasury bills will also increase. In this situation, more cuts should be made in government expenditure.