Tk 7.97 lakh crore budget to be unveiled in JS Thursday

Tk 7.97 lakh crore budget set to be unveiled in Parliament on Thu

Dhaka, June 05 - The first budget of the Awami League government's 6th term at Tk7.97 lakh crore for the fiscal year 2024-25 is set to be placed in the Parliament Thursday.

The budget of the outgoing fiscal year was over Tk7.61 lakh crore. It means that the budget of FY 24-25 will see an increase by 4.6 percent.

In Bangladesh, the fiscal year is counted from 1 July to 30 June, for the national budget. The proposed  2024-25 budget is the 53rd budget in the nation's history and the 25th budget of Awami League government in six terms.

Finance Minister Abul Hassan Mahmood Ali will place the first budget of his tenure for the FY2024-25 in the Parliament at 3.0 pm on Thursday. A 329-page budget speech has been prepared for the finance minister to present in the House.

However, the finance minister does not have to read the entire budget document . He will present his budget summary in front of the parliamentarians through slides.

According to the Ministry of Finance, as before, two-thirds of the budget around Tk4.69 lakh crore allocation goes to the non-productive sector to pay salaries, incentives, allowances, and subsidies.

Besides, Tk1.13 lakh crore is to be allocated for payment of interest on government borrowing from banks through bills, bonds, and saving tools.

The power-energy and agriculture sectors would get the highest allocation of subsidies. The budget is also slightly increasing the quantity of social safety network allowances.

The government employees will get a 5 percent incentive with their salary with adjustment of inflation, while direct fiscal measures for curbing overall inflation is not visible so far.

Dr. Mohammad Abdul Mazid, former chairman of NBR informed that the government has to raise allocation in different projects as there is no option to back from half-done of a project. 

But, the government has to be cautious in project allocation and enhance supervision and monitoring of budgetary money expenditure, he added..

Though a contractionary budget is required to curb inflation, the budget is slightly expansionary which will impact little to control inflation, he pointed out.

However, the proposed National Board of Revenue (NBR) gets an ambitious revenue target of Tk 4.8 lakh crore in the upcoming budget for the fiscal year 2024-25.

The finance ministry sources said that in the upcoming budget total revenue target is set at Tk 5.41 lakh crore. Of which Tk4.8 lakh crore will be collected by NBR and the rest of the revenue will come from the non-tax sector.

The government plans to borrow around Tk2.57 lakh crore from domestic and foreign sources to meet the deficit in the budget. The NBR has to collect Tk 4.8 lakh crore which is Tk 50,000 crore more than the budget target for the current fiscal year (FY2023-24). The revenue target is  Tk 70,000 crore more than the revised target.

In the 2023-2024 fiscal year budget, NBR was given a revenue target of Tk4.30 lakh crore. Later, under the pressure of NBR, the target was reduced to Tk 4.1 lakh crore. However, even though the target has been reduced, the revenue board is still far away from the revenue collection target.

According to the latest NBR data, the revenue board has collected a total revenue of Tk 2.89 lakh crore in the first 10 months from July to April of FY 2023-24. The target for this period was Tk 3.13 lakh crore. The deficit is Tk 24206 crore. Although the NBR achieved a growth of 15.61 percent in revenue collection.

The NBR will have to collect a revenue of Tk 96416 crore in the remaining two months of the FY 2023-24, May and June. The revenue board concerned thinks that it is impossible.

The revenue collection target is being raised every year without considering the revenue collection capacity. As a result, the government is facing a big challenge in financing the deficit budget.

In this situation, the NBR stakeholders feel that the revenue of Tk5.41 lakh crore in the proposed budget to be presented on June 6 is a big challenge.

The National Economic Council (NEC) earlier approved the Annual Development Programme (ADP) for the fiscal year of 2024-2025 with an outlay of Tk 265,000 crores. Besides, the NEC approved some Tk13,288.91 crores of autonomous bodies or corporations.-UNB