Eyes on next budget: outlay to get bigger

Finance Minister AMA Muhith is set to kick off his dialogue series with think-tanks, trade bodies, lawmakers and media on the forthcoming budget, tipped to be about Tk 340,000 crore -- about 15 percent higher than the current year's.

The first meeting is scheduled for today with the representatives of the Policy Research Institute, Economic Research Group and Bangladesh Institute of Development Studies and Bangladesh Economic Association at the NEC. Muhith will hold nine meetings until May on the budget.

The Finance Division has already started work on this year's revised budget and the budget for fiscal 2016-17, according to a finance ministry official.

The National Board of Revenue and the planning ministry have also started their work on the budget formulation.

In the next budget, a big chunk will be required for paying the salaries and allowances of public servants.

In the current fiscal year, the public servants' basic salaries were paid as per the new pay scale, but from next year their allowances will also have to be according to that system.

An additional Tk 15,904 crore will be required in the current fiscal year for payment of their basic salaries, according to finance ministry data.

In fiscal 2016-17, if the allowances are paid as per the new pay scale, the government will need Tk 23,828 crore more.

However, an official of the finance ministry said the actual cost may be much higher, which means a big portion of the next budget's non-development expenditure will go towards salaries and allowances.

Another big budgetary expenditure is on development: the size of the Annual Development Programme is likely to be about Tk 113,000 crore in the next fiscal year, up from Tk 97,000 crore now.

Every year the ADP size increases with no uptick in the efficiency of implementation.

A planning ministry official said the various ministries and divisions have already started sending in their demands and they are much higher than the primary estimate.

To finance the budget, the government will set its revenue earning target most likely at Tk 248,000 crore, with the NBR shouldering the biggest burden.

In the current fiscal year, the target for revenue earning has been fixed at Tk 208,443 crore.

The budget deficit will be fixed at 5 percent of the gross domestic product, like this year.

Since the ministries and divisions fail to use their allocations, the deficit tends to be around 4 percent.

The GDP growth target may be set at 7.2 percent and the inflation target at 6 percent.