Budget deficit may be set at 5.35% and the growth rate at 7.3% in the next fiscal year
The key challenges of the next budget have been identified as increasing revenue collection, controlling inflation, and implementing various reform proposals given by development partners, including the International Monetary Fund (IMF).
Experts say the government must confront and coordinate the challenges to maintain steep growth. This year’s budget is the last budget of the third consecutive term of the Awami League government. As such, it can also be called an election budget.
Bangladesh’s 52nd and the Awami League-led government’s 24th budget will be presented on June 1. The president has already called the budget session of the National Parliament on May 31. If everything goes well, Finance Minister AHM Mustafa Kamal will present the national budget of Tk7,61,991 crore for the 2023-24 fiscal year, already approved by the prime minister. The size of the budget is 12% higher than the outgoing fiscal year’s Tk6,78,064 crore.
The National Economic Council (NEC) meeting presided over by Prime Minister Sheikh Hasina has approved the Annual Development Program (ADP) for the 2023-24 FY with an expenditure of Tk2,63,000 crore, which is about 16% higher than the revised ADP of the current fiscal year and 7% higher than the original ADP. As in other years, the ADP has been planned through taking into account the country’s resources, foreign financing and macroeconomic conditions.
According to convention, the finalized budget will be approved by a special Cabinet meeting, chaired by Prime Minister Sheikh Hasina, to be held in Parliament on June 1. President Muhammed Shahabuddin will hold office at the same place instead of Bangabhaban on that day. Later, the premier along with Finance Minister AHM Mustafa Kamal will enter the session room of Parliament. Later, subject to the Parliament speaker’s permission, the finance minister will present the national budget.
While the budget will be presented on June 1, there is more time for discussion.
It is for the second time in the history of the country that the budget is being presented in Parliament on June 1. Former finance minister Abul Mal Abdul Muhith presented the budget of Tk4,00,266 crore for the financial year 2017-18 on June 1.
Since the Eid-ul-Azha holidays will begin at the end of June this year, the budget may be passed a week before or on June 25.
Earlier, at a meeting in the first week of April, the minister decided to set the GDP growth rate at 7.5% in the next budget. However, before finalizing the budget, the budget deficit may be slightly increased to 5.35% and the growth rate may be slightly reduced to 7.3%.
The key issues of the new budget are the total allocation of Tk1,02,000 crore for interest expenditure and Tk1,10,000 crore as subsidy.
Among the subsidies, Tk33,000 crore has been allocated to the power sector and Tk17,000 crore to the agricultural sector. The subsidy has risen by Tk10,000 crore in the power sector and Tk1,000 crore in the agricultural sector.
On the other hand, social safety net programs have been given more importance in view of the national elections. In the last budget, the government announced bringing 735,000 elderly, widows and disabled persons under the social security net.
The revenue target for the current financial year was Tk4,33,000 crore. It will be increased to Tk5,00,000 crore in the next financial year. Of the amount, the National Board of Revenue (NBR) has to collect Tk4,30,000 crore.
Benefits for public servants
Meanwhile, discussions and criticisms are going on about whether there will be dearness allowances or increments for government employees in this year’s budget. Government employees have already said that they want increments, not allowances.
On the other hand, the government has stated that there is no announcement of dearness allowances for government officials and employees in this year’s budget.
Since the implementation of the National Pay Scale in 2015, inflation has been around 40% but the salary has increased by Tk500-1,000 per year as an annual increment. During this period, the cost of living has increased by Tk5,000 or more.
Government officials and employees demand that, according to the recommendations of 2018, the government give instructions to all concerned to pay three special increments and form the “Ninth Pay Commission” for the time being, taking into account the overall situation including rising commodity prices, rising cost of living and inflation. They also state that because of the cancellation of the time scale and selection grade in the current pay scale, it has become difficult for low-paid officers and employees to run their families.
After eight years, this year’s budget is being discussed widely in all circles about providing some new facilities for government officials and employees. However, sources said that the government will not declare any new pay scale in the budget, but may announce a dearness allowance since the election is near.