Tk 7.46t budget likely for next fiscal year

A yet bigger budget worth Tk 7.46 trillion may be in the making for Bangladesh for the forthcoming fiscal year (FY), sources said, although the current one is trimmed for revenue-expenditure mismatch.

According to the sources, Finance Minister AHM Mustafa Kamal may set sights high also on gross domestic product (GDP) growth for the fiscal year 2023-24, targeting 7.5 per cent in a further rebound from the crisis-induced dips.

The new budget may be placed in parliament on June 1 (Thursday). A proposal in this regard has been submitted to Finance Minister AHM Mustafa Kamal, finance officials said, but the minister has the scope to defer the date by one more week until June 8.

In the new budget, according to the officials, the government may set a target to keep inflation at around 6.0 per cent-in what is deemed a daunting task as the current rate still stands close by 9.0 per cent in resurgence after a descent from around a double-digit level amid price rises at home and abroad.

In another major macroeconomic parameter, less-than-expected levels of resource mobilisation might widen the overall budget deficit to 6.0 per cent in proportion to the country's GDP.

The budget may require an allocation of over Tk 1.0 trillion to meet subsidy requirements in the next fiscal year, up from the current year's Tk 820 billion.

Size of the new annual development programme (ADP) for the next fiscal may be around Tk 3.0 trillion, up from the present Tk 2.46 trillion which on March 1 the government cut down to Tk 2.27 trillion as execution of projects remained on slow lane or postponed amid financial crunch at home and abroad.

Officials said due to global and internal financial instability the government is now under tremendous pressure in resource mobilisation which may come as a key challenge to finance the big budget for the next fiscal year apace with the country's desired economic growth matching its graduation process.

Like in the current fiscal year, the government may also continue to court austerity measures in the next fiscal year, officials said, although that will be tough as holding a national election is scheduled for new calendar year, or little before.

In the new budget, priority will be given to projects which are essentially needed while the less-important ones will be left aside in fund allocation.

Independent analysts and economists are, however, not in favour of expansionary budgeting so that people, hard-hit by price rises of goods and services and utilities, don't have to bear tax burdens.

The original budget size was over Tk 6.78 trillion for the fiscal year 2022-23. The GDP- growth target was 7.5 per cent, which was later forecast down. The revenue target is set at Tk4.33 trillion, and budget deficit Tk2.42 trillion or 5.4 percent of GDP. The average inflation was set at 5.6 per cent.

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