Tk 4,64,573cr budget placed, deficit 1,25,293cr
Dhaka: Finance Minister AMA Muhith placed Tk 4,64,573 crore budget for the 2018-19 fiscal year in Parliament on Thursday.
In the proposed budget, the target of gross domestic product (GDP) growth has been set at 7.8 per cent.
A cabinet division meeting chaired by Prime Minister Sheikh Hasina was held on Thursday at the cabinet room of National Parliament for approving the fiscal bill.
Finance minister AMA Muhith and other ministers were present in the meeting. After the cabinet passed the bill, President Abdul Hamid signed the bill and sent it to the parliament secretariat for presenting before the house.
The finance minister started budget speech at about 12:30pm with Speaker Shirin Sharmin Chaudhury in the chair.
This is the country’s 48th national budget while the 19th budget of the Awami League government and the 12th for Muhith.
The revenue collection target for the next fiscal year has been set at Tk 3,39,280 crore of which NBR tax revenue is Tk 2,96,201 crore.
The minister in his speech said: In the past 10 years starting from 2009, we remained steadfast in taking forward our people-centric agenda mainly for the benefit of the poor and the disadvantaged. During this decade we achieved the average GDP growth rate of 6.6 per cent while the developing economies’ average GDP growth was 5.1 per cent. Public investment rose to 8.2 per cent from 4.3 per cent. Per capita income increased from US$759 to US$1,752. Inflation declined from 12.3 per cent to 5.8 per cent. Revenue-GDP ratio rose to 10.3 per cent from a low of 9.2 per cent. The size of budget grew from Tk. 89,000 crore to Tk. 4,64,573 crore. Annual export registered an increase from US$15.6 billion to US$34.8 billion. Annual import stood at US$47.0 billion increasing from US$22.5
billion. The forex reserve increased from US$7.5 billion to US$32.2 billion. The rate of poverty declined to 24.3 per cent from 31.5 per cent and extreme poverty rate reduced to 12.9 per cent from 17.6 per cent.’
Revenue collection of current fiscal year
The minister said, ‘In the first nine months of the current fiscal year, the collection of total revenue stood at Tk. 1,62,109 crore which is 62.48 per cent of the revised target. During the same period, the growth of NBR revenue collection stood at 15.4 per cent which is more than the average growth (14.6 per cent) of last six years (from FY2011-12 to 2016-17).’
‘I am optimistic that the year-end buoyancy in revenue collection will help achieve the target’, he added.
He also said, ‘We set the target for this year’s GDP growth at 7.4 per cent. Meanwhile, Bangladesh Bureau of Statistics has estimated the growth rate at 7.65 per cent.’
Annual Development Programme (ADP)
According to the Finance Minister, the government spending in the first nine months is 45.0 per cent of the revised target of the current fiscal year.
‘In the first 10 months, 52.4 per cent of ADP allocation has been spent. The utilisation of project aid, for the first time, has increased significantly. In the first 10 months of FY2017-18, the utilisation rate is 61.1 per cent compared to 47.7 per cent in same period of the previous fiscal year. Currently the implementation of mega projects is under way in full swing. Therefore, it is assumed that there will be dynamism in the implementation of government expenditures, especially the ADP. However, the overall budget deficit will stay within 5 per cent of GDP’, the minister said.
Budget structure for fiscal year 2018-19
In FY2018-19, the total revenue income has been estimated at Tk.3,39,280 crore which is 13.4 per cent of GDP. Out of this target, an amount of Tk. 2,96,201 crore (11.7 per cent of GDP). I believe that this target is realistic. Because, huge reforms in terms of manpower restructuring and business process reengineering have already been implemented in NBR. The estimate of tax from non-NBR sources is Tk.9,727 crore (0.4 per cent of GDP). Besides, the collection of revenue from the non-tax sources is estimated at Tk.33,352 crore (1.3 percent of GDP).
In FY2018-19, the total expenditure has been estimated at Tk. 4,64,573 crore (18.3 per cent of GDP). If the ADP allocation of Tk. 7,869 crore for Autonomous Bodies is added to this amount, the size of the budget will be Tk. 4,72,442 crore (18.6 per cent of GDP). The allocation for non-development and other expenditures has been estimated at Tk.2,91,573 crore (11.5 per cent of GDP) and the development expenditure has been estimated at Tk.1,73,000 crore.
NBR sets revenue collection target
The revenue collection target by the National Board of Revenue (NBR) has been set at Taka 2,96,201 crore in the proposed national budget for FY19 of which the bulk of Taka 1,10,543 crore will come from the Value Added Tax (VAT).
The Finance Minister revealed this while placing the proposed national budget for FY19 at the national parliament on Thursday.
Muhith informed the House that the NBR is eying to collect the second highest Taka 1,02,201 crore revenue from the income tax and other direct taxes followed by Taka 48,766 crore from the supplementary duty, Taka 32,589 crore from import and export tax, Taka 2,091 crore from excise duty while the rest of Taka 11 crore from turnover tax.
The revenue collection target by the NBR in the outgoing fiscal year
(FY18) was earlier set at Taka 2,48,190 crore which was later revised at Taka 2,25,000 crore.
The overall budget deficit will stay within 5 per cent of GDP, said the Finance Minister.
The overall budget deficit will be Tk.1,25,293 crore which is 4.9 per cent of GDP. Of this, an amount of Tk.54,067 crore (2.1 per cent of GDP) will be financed from external sources while an amount of Tk.71,226 crore (2.8 per cent of GDP)will be financed from domestic sources. Of the domestic sources, Tk.42,029 crore (1.7 per cent of GDP) will be borrowed from the banking system while Tk.29,197 crore (1.2 per cent of GDP) from National Savings Schemes and other non-bank sources.
Inflation rate for the next fiscal year has been set at 5.6 per cent.
The minister in his budget speech on Thursday said, ‘The food and non-food inflation in April 2018 were 7.3 per cent and 3.5 per cent respectively.’