Pre-budget discussions begin today
Finance Minister AMA Muhith will begin pre-budget consultations today as part of his preparation to formulate the budget for next fiscal year when he would eye to hit a milestone of placing a Tk 400,000 crore outlay.
Muhith will consult with several economists from the Bangladesh Economic Association, Bangladesh Institute of Development Studies, Economic Research Group and Policy Research Institute, on the first day of discussions for the budget for fiscal 2017-18.
Every year, before placing the budget in parliament, the finance minister holds pre-budget discussions with various stakeholders, but very few of their recommendations are reflected in the budget, they allege.
Finance ministry officials also admitted that not many proposals are accommodated in the budget.
On many occasions, budget recommendations mention institutional reforms, but adopting those are not possible without a green signal from the government high ups, they added.
There is no legal binding to accepting the proposals either, said the finance ministry official.
However, since mid last decade, the opinions of stakeholders are taken as a democratic practice.
Mirza Azizul Islam, former finance adviser to caretaker government in 2007-08, yesterday said suggestions made by stakeholders at the pre-budget discussions contain many contradictions. The finance minister cannot accept all of those suggestions, he added. “In certain cases, you cannot go by the suggestions. You have to exercise your own experience, knowledge or any other research, if any.”
Citing from his own experience as a finance adviser, Islam said those who produce biscuits demand imposition of high duties on the import of biscuits in the pre-budget discussion to protect the local industry.
But if a 300 percent duty is imposed as proposed, the price of biscuits will increase and the burden will fall on the consumers; there is no logic behind imposing high duties to protect a very old industry, he added.
There are some positives to hosting a pre-budget discussion, as a finance minister is not always aware of all issues – it can help them know the various issues and determine priority, said Islam.
A ministry official said Muhith is giving more emphasis on the next budget to accommodate all his plans, as it will be completed before the next national election.
Earlier this month, he gave an indication that the next budget may be Tk 420,000 crore, which is 23 percent higher than the current budget.
However, as per the medium-term budgetary framework, the size of the next budget would be around Tk 390,000 crore.
It would set another record if it crosses the Tk 400,000 crore mark. When this government assumed power in 2009, it set a record of setting the first budget worth over Tk 100,000 crore. The size of the budget was Tk 110,524 crore in fiscal 2009-10.
The size of the current budget is Tk 340,605 crore, but it may be downsized to less than Tk 310,000 crore in the revised budget, said an official.
The planning ministry is going to amend the annual development programme (ADP) for the current fiscal year within a couple of days. The size of the ADP will be Tk 110,700 crore.
It is likely to be cut by Tk 6,500 crore, said a planning ministry official.