Finance Minister to place Tk 6,78,064 crore budget Thursday

Budget for 2022-23

Dhaka, June 9 - Finance Minister AHM Mustafa Kamal is scheduled to place a Taka 6,78,064 crore budget for the next fiscal year (FY 2022-23) at the Jatiya Sangsad (Parliament) Thursday with the major challenge of reining in inflation amid unfavourable global economic situation.

The finance minister is going to place the budget at a time when the global economy is passing through a volatile situation mainly because of the slow economic recovery from the COVID-19 pandemic along with the ongoing Russia-Ukraine war.

Besides, there is a high trend of inflation as the price of essentials and commodities is hurting the common people, Taka is constantly losing value against the US dollar, the import of luxury items is being discouraged to lessen pressure on the foreign currency reserves.

According to Finance Division officials, the next budget aims to attain a GDP growth rate of 7.5 percent based on the positive trend of economic recovery from the pandemic while it also eyes to contain inflation at 5.6 percent.

The budget of Taka 6,78,064 crore is around 15.3 percent of GDP will be Taka 74,383 crore higher than the original budget of the outgoing fiscal year (FY2921-22) which was Taka 6,03,681 crore. The original budget of the outgoing fiscal year was around 17.5 percent of GDP.

To give respite from high inflation trend, the government is focusing on increasing subsidies.

Tax-free income ceiling for the individual taxpayers in the next fiscal year is likely to remain at Taka 3 lakh. The minimum level of income tax will remain the same at Taka 5,000 for the taxpayers of Dhaka South and Dhaka North city corporation areas. The minimum tax for the individual taxpayers will remain at Taka 4,000 in other city corporation areas and at Taka 3,000 in other areas.

To meet the demand for this huge budget, the government has set an overall revenue collection target of Taka 4,33,000 crore which would be 9.8 percent of GDP. The overall revenue collection target in the outgoing fiscal year (FY22) was earlier set at Taka 3,89,000 crore which was 11.3 percent of GDP.

In the new budget, the National Board of Revenue (NBR) will be given the task of mobilizing Taka 3,70,000 crore which is 8.4 percent of GDP. The original revenue collection target by the revenue board in the outgoing fiscal year was Taka 3,30,000 crore which was also 9.5 percent of GDP. The revenue collection target by NBR this time will be Taka 40,000 crore or 12 percent higher.

The next budget also sets a target of attaining non-NBR revenue of Taka 18,000 crore and non-tax revenue of Taka 45,000 crore which was Taka 16,000 crore and 43,000 crore respectively in the outgoing fiscal year. Besides, the government is expecting to get Taka 3,271 crore as foreign grant.

Finance Division officials said that the next budget is likely to set a budget deficit of Taka 2,45,064 crore which is estimated at Taka 30,383 crore higher than the original budget deficit of Taka 2,14,681 crore in the outgoing fiscal year. 

To meet the deficit financing in the new budget, the government has raised its target of borrowing from the domestic sources of Taka 1,46,335 crore of which Taka 1,06,334 crore. This will come from the banking sector, Taka 35,000 crore from the savings certificates and the rest of Taka 5,001 crore from other sources.

Besides, the government is also eying Taka 95,458 crore from the foreign sources as loans and grants.

Out of the total budget size, the government is likely to earmark Taka 4,11,406 crore as operating cost including Taka 76,412 crore as the salaries and allowances of the public servants, Taka 73,175 crore as the interests of the domestic loans and Taka 7,200 as the interests of the foreign loans.

The government has set an original Annual Development Programme (ADP) of Taka 2,46,066 crore which was Taka 2,25,324 crore in the outgoing fiscal year.

The GDP size in the next fiscal year has been estimated at Taka 44,49,959 crore as the government is hopeful of attaining a GDP growth rate of 7.5 percent. The GDP growth target in the outgoing fiscal year was 7.2 percent.

Besides, the government will pursue various fiscal measures to contain inflation at 5.6 percent in the next fiscal year against the target of 5.3 percent in the outgoing fiscal year.

The new budget is likely to earmark Taka 82,745 crore as subsidy to various sectors which is 1.9 percent of GDP. In the revised budget of the outgoing fiscal year, subsidies were estimated at Taka 66,825 crore or 1.7 percent of GDP. - News Desk with BSS