• July 14, 2024, 12:38 am
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Ali places Tk 7.97 lakh crore budget for FY25 this afternoon

News Desk
News Desk
Update: Sunday, June 16, 2024

Finance Minister Abul Hassan Mahmood Ali is set to unveil a possible Taka 7,97,000 crore national budget for the next fiscal year (FY25) at Jatiya Sangsad (JS) this afternoon.

He will announce the budget amid the growing challenges of containing inflation, maintaining a sound foreign currency reserve, a stable exchange rate and generating more revenues.

This will be the country’s 53rd budget and the 25th of the Awami League (AL) government in six terms. This budget will also be the 21st under the rule of Prime Minister Sheikh Hasina in different terms.

Tajuddin Ahmad presented the country’s first budget as finance minister of the post-independence Bangabandhu government in 1972.

This budget for FY25 will be the maiden budget of incumbent Finance Minister AH Mahmood Ali.

Career diplomat Ali, who previously served the Cabinet as the Minister for Disaster Management and Relief and the Minister for Foreign Affairs, would eye building a ‘Smart Bangladesh’ despite various obstacles and adversities.

The theme of the budget for the next fiscal year would be “Pledge towards building a happy, prosperous, developed and smart Bangladesh” in pursuit of turning the country’s economy into its previous sound state.

Amid the global volatile condition and adversities, the finance minister is eying a 6.75 percent GDP growth while containing the inflation at 6.50 percent although the general point to point inflation is still hovering slightly below the double digit mark albeit various efforts from the government to tame inflation.

Finance ministry officials said the possible budget size of Taka 7,97,000 crore would be 4.60 percent or likely around Taka 35,215 crore higher than the budget of the outgoing fiscal year (FY24). The country’s GDP size has been estimated at Taka 55,97,414 crore.

Apart from the already approved Annual Development Programme (ADP) outlay of Taka 2,65,000 crore, the possible budget will see an estimated deficit of Taka 2,56,000 crore excluding grants. If the grants are considered, then the overall budget deficit will stand at Taka 2,51,600 crore.

As the government wants to lower expenses, it is likely to contain the budget deficit to 4.6 percent of the gross domestic product in the next fiscal year. The government usually keeps the budget deficit at around 5 percent.

In the current fiscal year (FY24), the budget deficit is Taka 2,61,785 crore.

Apart from the original ADP allocation of Taka 2,65,000 crore, Taka 5,943 crore is likely to be allocated for schemes, Taka 7,627 crore for special projects outside the ADP and Taka 2,884 crore for the food for work programme.

The officials said the government this time is neither pursuing a high and ambitious growth nor taking fresh mega projects.

Besides, there will be added pressure on repaying principal amounts and interests against foreign loans for which the National Board of Revenue (NBR) would put higher emphasis on generating more revenues.

To face the expenditure pressure, the government will eye for realizing overall revenue of Taka 5,41,000 crore of which the revenue board alone would be entrusted with collecting Taka 4,80,000 crore which is Taka 50,000 crore higher than the outgoing fiscal year.

Apart from the NBR, the government will strive to collect Taka 15,000 crore as non-NBR revenue while Taka 46,000 crore as non-tax revenue.

Besides, Taka 4,400 crore is expected to come as foreign grants.

Finance Division officials familiar with the process of budget formulation said that apart from containing inflation, the priorities of the next budget will include returning the economy into its previous stable state, keeping the prices of commodities within the purchasing power of the common people and maintaining decent living standards by citizens.

The fresh budget will see various austerity measures for reining in public expenditure alongside boosting the farm productivity and keeping the supply chain normal.

Besides, steps towards continuous monitoring of markets to contain inflation, increasing the coverage of the social safety nets, measures for automatic adjustment of fuel oil in line with the global market would help put a positive impact on inflation.

The next budget features a good number of initiatives that include ensuring food for all, improvement in food supply system, widening the coverage of the social safety nets, modernizing every village, ensuring digital health and education system, fast track infrastructure projects, facing the climate change impact and global adversities.

To meet the budgetary expenditure, the government eyes borrowing of around Taka 1,27,200 crore from foreign sources of which Taka 36,500 crore will be spent as repayment of foreign loans. The net foreign loan is likely to stand at Taka 90,700 crore.

On the other hand, the government is likely to borrow Taka 1,60,900 crore from the domestic sources including Taka 1,37,500 crore from the banking system and Taka 23,400 crore as loan from the non-bank sources.

The government is also likely to earmark an allocation of around Taka 5,06,971 crore as its operating cost, Taka 93,000 crore as interest payment of local loans and Taka 20,500 crore as interest payment of foreign loans, Taka 37,989 crore as capital expenditure, Taka 119 crore for food account and Taka 8,457 crore as loan and advance.

To widen the VAT net, the NBR will beef up its operations to set up EFDs in Dhaka and Chattogram. Besides, in order to detect newer taxpayers, the NBR has a plan to work with the BRTA, DPDC and city corporations in an integrated manner.

The government is also likely to make mandatory submission of e-challans in case of VAT payment of Taka 20 lakh and above while the current ceiling is now Taka 50 lakh. Besides, some 20.26 lakh people are likely to be included afresh in the social safety nets to cushion them from the impact of inflation.

Meanwhile, a Finance Ministry press release said that to make the budget more participatory, all the budget documents would be uploaded into the websites of the Finance Division www.mof.gov.bd the NBR www.nbr.gov.bd while anyone can read and download these documents while browsing those websites.

Besides, anyone from home and abroad can send their opinions and recommendations on the budget through the email budgetfeedback@finance.gov.bd.

The finance minister will hold a post-budget press conference on Friday at 3:00 pm at the Osmani Memorial Auditorium in the capital.

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