Finance Minister AMA Muhith is set to place the national budget for the next fiscal year (FY17) in parliament this afternoon (Thursday afternoon) with a likely outlay of Tk 340,605 crore (3.4 trillion) aiming to create more jobs, wooing investment and speeding up the implementation of a clutch of ‘transformational’ mega-projects.
Muhith will place his 8th consecutive budget as finance minister of the AL-led coalition that has been in power since 2009, and his own 10th overall, putting him in a tie with the late Saifur Rahman. Muhith is expected to start his presentation using Powerpoint at 3pm.
Officials at the Ministry of Finance said that the new budget eyes a GDP growth target of 7.2 percent, up from the outgoing fiscal’s target of 7 percent. However, as per the provisional estimation of the BBS, the GDP growth is poised to reach 7.05 percent in the outgoing fiscal.
Considering the declining trend of inflation, the inflation target next year is likely to be 5.8 percent, against the outgoing fiscal’s 6.2 percent.
The officials also said amid huge demand from the business community for keeping intact the package VAT, this VAT is likely to stay, but the rate could be higher. Besides, the individual income tax ceiling is likely to stay the same. The new VAT Act is unlikely to take effect from 1st of July.
This time, the Finance Minister will include the ‘Fast Track’ projects in a separate capital budget to demonstrate the government’s emphasis on them, according to the officials.
The document for the mega projects would be titled “Big projects in Transforming Infrastructure: New dimension in Accelerating Growth”.
The officials also said that the overall revenue collection target for the next budget is likely to be Tk 242,752 crore while the budget deficit would be likely Tk 97,853 crore, within 5 percent of the GDP. It is mostly proposed to be met from the banking sector, savings certificates and loans from the bilateral and multilateral development partners.
Out of the overall revenue collection target, the revenue collection goal from the NBR system is likely to be around Tk 203,152 crore.
The budget for the next fiscal year is likely to be Tk 45,505 crore higher than the original planned outlay for the outgoing fiscal, which was Tk 295,100 crore. Apart from the NBR revenue system, the non-NBR revenue collection target is likely to be Tk 7,250 crore while around Tk 32,350 crore is likely to be collected from various service fees and non-tax sources.
Besides, the government has set a target of getting Tk 5,516 crore as foreign grant.
To meet the budget deficit, the government is likely to take Tk 38,947 crore credit from the foreign sources of which Tk 8,158 crore would be spent for repaying the interest for foreign credit. As a result, the net government credit from foreign sources is likely to be around Tk 30,789 crore.
Besides, the government is set to take Tk 61,548 crore loan from the local sources of which Tk 38,938 crore would come from the banking sector, Tk 19,610 crore from the savings certificates and Tk 3,000 crore credit from the other sources.
Around Tk 117,027 crore would be spent for development activities including the Annual Development Programme (ADP) outlay of Tk 110,700 crore. Some Tk 4,147 crore would be spent as non-ADP project expenditure alongside Tk 1,826 crore under the Food for Work Programme and Tk 354 crore for the development programme to be financed from revenue budget.
Besides, Tk, 22,700 crore is likely to be kept as subsidy in the new budget which will be lower than the outgoing fiscal year.
If the proposed expenditure of Tk 9,645.80 crore for the autonomous bodies and corporations is added to the original ADP, then the overall development expenditure for the next fiscal year would stand at Tk 1,23,345.80 crore.
Besides, Tk 215,744 crore is likely to be earmarked as non-development expenditure for the next fiscal including Tk 188,966 crore as non-development revenue expenditure, Tk 38,240 crore to pay the interest on credit taken from the domestic sources and Tk 1,711 crore to pay the interest on foreign credit.
Apart from this, Tk 26,778 crore is likely to be earmarked as non-development capital expenditure, Tk 8,428 crore as loan and advance sector, and Tk 594 crore as expenditure for food.
Finance Ministry officials said to carry forward Bangladesh’s dream of graduating to a middle income country by 2021, the finance minister in his budget speech would outline ways to put the country on a higher growth path for attaining 8 percent GDP growth by the end of the government’s tenure.
Job creation for over two million youths joining the workforce every year would receive attention, as job growth slowed in recent years.
The finance minister would hold a post-budget press conference on Friday at 4:00 pm at Osmani Memorial Auditorium in the city, it was announced, UNB reports.