Finance Minister AMA Muhith has presented the proposed annual budget for 2016-17 fiscal in parliament. The budget has lofty and ambitious targets and has the biggest ever financial outlay in the country's history with Tk 3.41 trillions and an annual GDP growth rate of 7.20 per cent. The proposed budget has a deficit of Tk 978.53 billion which will be collected from domestic sources i.e. banking channel and external sources like foreign aids and grants. To meet the huge deficit, the government has to rely heavily on banking channel which will crunch credit flow in the private sector. Due to lack of credit exposure of banks to private sector employment generation will be seriously hampered.
In order to cover the budgetary expenditure amount, the responsibility of bulk amount of target revenue collection, i.e., Tk 2.03 trillion will lie with the NBR which seems difficult under the prevailing set-up. The NBR will have to be equipped with enhanced capacity.
The government has widened the tax net and upped the existing tax rates which will result in price hike of essentials.
The government machinery will have to work efficiently to implement the budget effectively. Good governance, transparency and accountability in the government organisations will have to be ensured. It has to be ascertained that public money is properly utilized and no misuse of government funds is taking place.