Bangladesh's election-year budget today

Realising higher revenue amid hardship remains a hard task as the government places in parliament today its election-year budget with an incremental outlay of over Tk 7.62 trillion.

Economists are for adopting a subsistence-focused national budget for now, instead of growth-centric one, in the current Bangladesh context of high consumer prices partly for a lingering global supply-chain and currency crunch.

They find containing inexorable inflation a core challenge for now and an unforeseeable time ahead. Deregulating imports and remedying dollar dearth are seen imperative for controlling inflation, but seem hard tasks for the government.

In such a challenging time both at home and abroad on the economic front, Finance Minister AHM Mustafa Kamal is scheduled to place the national budget for fiscal year 2023-24 this (Thursday) afternoon at the Jatya Sangsad.

Apart from the ongoing higher inflationary pressures on the economy and livelihood, and depleting foreign-exchange reserves, higher unemployment and implementation of a number of reform programmes suggested by the IMF are also among the daunting tasks.

On the external front, the global economy has been smarting under multiple domino effects, like stubborn inflation and possible recession as a result of the prolonged war in Ukraine.

This happens to be the fifth budget of the present government and for the incumbent finance minister himself. This is the 52nd budget since the independence of Bangladesh and the 15th in a row by the Awami League-led government in its consecutive three tenures.

An auditor-turned-politician, Mr. Kamal may make a brief budget speech, officials told the FE on Wednesday.

The main objective or vision laid in the budget is to build up a happy and prosperous smart Bangladesh by 2041-a catch phrase that is also envisaged to be AL's campaign focus in the forthcoming general election due in months. The new budget outlay of over Tk 7.62 trillion is up by over 15 per cent from the current revised budget size.

Of the outlay, over Tk 5.03 trillion is expected to come as total revenues, including foreign grants, leaving a substantial deficit.

The National Board of Revenue (NBR) contribution has been estimated at Tk 4.3 trillion-up by over 16 per cent from the sum in the current revised budget.

The government eyes non-tax revenue or NTR, which comes as dividends and fees from state-owned enterprises, worth Tk 500 billion to feed the budget. The Non-NBR tax income is expected to be Tk 200 billion, or up by 11 per cent from the revised budget of the current FY.

And the budget deficit is again going to break its traditional band of 5.0 per cent of the GDP, with the imbalance reaching 5.2 per cent in FY 2024. In absolute terms, this is Tk 2.57 trillion-up by 15 per cent year on year.

The government borrowing target from the banking system is Tk 1.32 trillion-an increase of nearly 15 per cent from the revised budget figure.

Economists point out a double bind for government bank borrowing-its higher borrowing from banking system may create a crowding-out impact on the economy with the consequence of fund shortages for private-sector investors. And if the government borrows from the central bank, the inflationary pressure will build up.

The government plans to borrow less, Tk 180 billion (net), with the savings certificates as the tool.

The GDP (gross domestic product) growth rate has been estimated at 7.5 per cent, and the inflation rate at 6.5 per cent, officials concerned said. But the rate of inflation remained steep at 8.64 per cent in April on a 12-month average, by official count.

An official handout released Wednesday said the present government has made a founding-stone for elevating Bangladesh to a smart country. There is a need for four pillars for building up the smart country: smart citizens, smart government, smart society, and smart economy.

"This is the first budget for making Bangladesh into a smart one," says the handout, on the eve of the budget presentation.

It says the budget has focused health, agriculture, food production, and its management in view of the current realities.

And the food programme for the poor people will continue round the next year and the social-safety-net programmes have been enhanced, according to the government disclosure.

The budget speech and other budget documents will be available on www.mof.gov.bd.

The documents will also be available at www.bangladesh.gov.bd, www.nbr.gov.bd, www.plancomm.gov.bd, www.imed.gov.bd, www.pressinform.portal.gov.bd, and www.pmo.gov.bd.

People living both at home and abroad may make suggestions on the budget and those will be considered while finalizing the budget.

The finance division will organise a post-budget conference at the city's Bangabandhu International Conference Centre on Friday at 3:00pm. Mr. Kamal will speak there and respond to queries from the media people.

jasimharoon@yahoo.com