Finance minister set to unveil FY23 national budget of 6.80 tonnes of Tk on Thursday
Jun 07, 2022 4:47:37 p.m.
07 June 2022 17:00:32
Finance Minister AHM Mustafa Kamal is expected to place the national budget of Tk 6.80 trillion in the Jatiya Sangsad for the financial year 2022-2023 (FY23) on Thursday.
The size of the budget will be around 15 percent of the gross domestic product or GDP of the country.
It is the country’s 50th budget and the Awami League government’s 23rd 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 the NBR is 4.33 trillion taka, an increase of 9.0% over the current year revenue target and the Annual Development Program (ADP). ) is set at 2.44 trillion taka.
Experts point to having measures to control rising inflation, stabilize the exchange rate and measures to ensure food security, according to a report by the UNB agency.
Tajuddin Ahmed presented the first budget as first finance minister of the post-independence Bangabandhu government in 1972.
In the next budget, the GDP growth target is set at 7.5% and inflation will be maintained at 5.5%.
In the proposed budget, the GDP forecast is set at 7.5%, about Tk 44.5 trillion, or Tk 14 trillion more than in FY22, finance division sources said.
The size of GDP in FY22 was Tk 28.34 trillion.
Government policymakers believe that in FY23, three major infrastructure assets in the country will contribute to GDP growth despite a projected decline in the global economy due to the Russian-Ukrainian war.
Relevant officials believe that three major megaprojects will be launched in FY23. The Padma Dream Bridge will be inaugurated on June 25. This will open new doors for business and trade, which will have a positive impact on the economy.
Ministry officials said that the development of power, energy, communications and transport sectors will also boost growth after the completion of these three megaprojects.
The development impact of these sectors will play an important role in achieving growth in other sectors, including manufacturing. Naturally, importance is given to agriculture to ensure growth. Therefore, the focus is on securing the supply of agricultural inputs and maintaining subsidies. Growth is expected to accelerate if ongoing reforms in various sectors (revenue sector and investment) are implemented, they said.
According to the finance division, food, fuel and fertilizer prices have risen sharply due to the Russian-Ukrainian war. Farmers get it at a lower price because the government subsidizes fertilizer. A plan has been made to give a subsidy of 120 billion taka to agriculture also in the next financial year.
The introduction of incentive packages in the new budget will also be continued. This will add to sectoral GDP.
In this context, the former financial adviser to the former interim government, AB Mirza Azizul Islam, told UNB that if there is no growth, there will be stagnation in the economy.
“Poverty must be reduced by securing employment by increasing the coverage of social safety net programs,” he said.
Dr M Masrur Reaz, an economist and chairman of Policy Exchange of Bangladesh, said the budget faced challenges in maintaining a stable forex exchange rate and import trade inflation.
The budget should have measured inflation as well as controlling commodity prices and the health sector by developing the institutional capacity of government entities.
The government has set an ambitious revenue collection target of Tk 4,330,000,000,000,000, comfortably the highest ever, although reaching this target has never been the goal.
The National Revenue Board (NBR), a wing of the Internal Resources Division (IRD), generally collects revenue for the government. The next budget is expected to have a revenue target of 4.33 trillion taka, which is 440 billion taka higher than the budget target for the current fiscal year and 9.8% of GDP.
According to the calculation, the budget deficit would amount to 2.44 trillion taka, or 5.5% of GDP.
According to sources at the Ministry of Finance, the government would borrow 1.28 trillion taka from domestic sources and 1.16 trillion taka abroad to fill the gap in the proposed budget.
Of domestic borrowing, 938.89 billion taka would come from the banking system while 344.52 billion taka would come from savings certificates.