Tk 2.95 lakh crore burdget with 86,657 crore deficit announced

Tk 2.95 lakh crore burdget with 86,657 crore deficit announced

0

Finance Minister AMA Muhith on Thursday proposed a national budget of Tk 295,100 crore for FY 2015-16 to what he said take the country on a higher growth trajectory, projecting a 7.0 per cent rate of growth.
“I am sure, achieving this goal will not be impossible if proper and timely implementation of these development plans and reform programmes is ensured,” he said in his budget speech made in Parliament.But the budget will start with an additional Tk 16,000 crore burden on the shoulder of the government to pay latest pay scale for civil servants that will come into effect from July.
The size of the proposed budget is 23.12 per higher than that of the current fiscal. Earlier in the day, the cabinet approved the proposed budget at a special meeting in Parliament building.
This is the country’s 44th budget where Muhith,has placed his seventh budget in a row.
The Finance minister proposes uniform amount of minimum Tax at Tk. 4 lakhs instead of diverse rates based on locations. However, the tax payers has to pay Tk. 3 lakhs, Tk 2 lakhs, and Tk one lakhs for City Corporation, Pourashava and located at district headquarters as minimum tax as per the existing law.
Muhith said “Direct tax is universal in nature and as such uniform rate should be applicable regardless of geographical locations in Bangladesh.”
Considering prevailing inflation, tax exemption threshold for individual taxpayers has been increased compared to previous year to reduce tax burden for marginal taxpayers.
For the first time Muhith proposed tax treatment on basic salary, bonus and festival allowance for both government and non-government salaried employees.
As per existing provision, all allowances excluding basic salary of Government employees are tax free which is discriminatory. As first step to remove such discrimination, I propose similar taxation, he said. Salary of Government employees will increase soon.
Clarifying on growth target Muhith told the Parliament continuation of a growth-supportive monetary policy that includes targeted credit supply to productive sectors including agriculture, diminishing rate of interest and market-sensitive exchange rate etc. will create a wholesome environment for economic activities.
He said industry and service sectors on the supply-side and, consumer spending and public and private investment, on the demand-side, will be the drivers of this growth. Moreover, efficient coordination between fiscal and monetary policies will help realize this goal.
For the FY 2015-15, Muhith set inflation target at 6.2 per cent as reflecting fall in international oil prices, favourable agricultural production, and continuous improvement in domestic distribution system and impact of restrained monetary policy.
Finance Muhith took a challenges setting a target Tk. 28770 crore revenue collection in the upcoming budget in which the share of the National Board of Revenue is Tk. 176370 crore.
Muhiht acknowledged that the revenue collection target is indeed ambitious since it is 30.62 per cent higher than that of the current financial year (2014-15).
Regarding the big target of revenue, the finance minister explained that this revenue will be collected from four sources namely Income Tax, Value Added Tax (VAT), supplementary Duty and Import Duty (Customs).
The overall budget deficit has been estimated at Tk 86,657 crore excluding grants.
The revised budget for the outgoing fiscal year stood at Tk 2,39,668 crore from the original outlay of Tk 2,50,506 crore.
Finance minister proposed to manage Tk. 56,523 crore (3.3 percent of GDP) from the domestic sources to meet the over all budget deficit of Tk. 86657 crore which is 5.0 percent of GDP. The rest of Tk. 30,134 crore (1.8 percent of GDP) will be financed from the external sources.
Of the domestic financing, Tk. 38,523 crore (2.2 percent of GDP) will come from the banking system and Tk. 18,000 crore (1.0 percent of GDP) from savings certificate and other non-banking sources, Muhith proposed to manage the deficit.
If we can increase disbursement from the huge pipeline of foreign assistance, we will be able to reduce our dependence on domestic borrowing.
We will continue our efforts to this end so that foreign aid utilisation rate increasesin the next year.
In the proposed budget, 23.4 percent of the total outlay has been allocated to social infrastructure sector, of which 20.4 per cent has been proposed for the human resource sub-sector (education, health and other related sectors); 30.6 per cent of the total allocation has been proposed for the physical infrastructure sector, of which 13.9 per cent will go to the overall agriculture and rural development, 8.9 per cent to overall communication and 6.3 per cent to power and energy sector; and 28.0 per cent of the total allocation has been proposed for the general services sector.
Besides, 2.2 per cent has been allocated for public-private partnership (PPP), financial assistance for various industries, subsidies and equity investment in state-owned banks, commercial banks and financial institutions; 11.9 per cent for interest repayment; and the rest 3.8 per cent for net lending and miscellaneous expenditure. – Staff Reporter

Share.

Comments are closed.