Budget targets 7.8 percent growth

The finance minister has placed the 47th annual budget in the House with a record outlay of over Tk 4,64,573 crore, which is about 16 percent higher than the one in the previous fiscal, making it the largest budget in our history despite rising shortfalls in budget implementation over recent years.

The budget is targeting a highly optimistic GDP growth rate of 7.8 percent. Total revenue income has been estimated at Tk 3,43,331 crore, of which Tk 2,96,201 crore will be collected by the National Board of Revenue, leaving a deficit of Tk 1,25,293 crore that must be met from domestic banking and non-banking sources, as well as using foreign credit. This means that the government will have to spend Tk 51,340 crore for interest payment—24 percent higher from the current fiscal to finance the increased deficit of 5 percent from 4.76 percent.

Despite previously indicating that corporate taxes may go down, the finance minister has kept them mostly unchanged, proposing a reduction only for banks, insurance and financial companies, and an increase in taxes for apparel manufacturers. The exemption ceiling for individual taxpayers has also been left unchanged. Emphasising the increased need for energy in all economic activities, the finance minister raised the proposed allocation for the power division and the energy and mineral resources division by 2.72 percent compared to the revised budgetary allocation in the current fiscal.

While generating enough revenue to meet the increasing expenditures remains the major concern, the budget definitely seems to include measures aimed at courting voters ahead of the next general elections. Meanwhile, the mega budget trend continues, leaving room for a mega portion of the budget to once again remain unimplemented. The policy seems to be that the bigger the budget, automatically bigger will be the development, ignoring the bigger waste, the bigger inefficiency and not to mention the bigger corruption.