Dhaka: Finance Minister AMA Muhith is set to unveil nearly a Tk3 lakh crore budget for the fiscal year 2015-16 on Thursday likely eying a 7.1% GDP growth, down from 7.3 % in the outgoing fiscal year.

This will be the country’s 44th budget, while 16th by the Awami League government. And for Muhith, it will be his 9th budget presentation and 7th budget presentation in a row.

Like the previous years, the Finance Minister will begin his budget presentation at about 3:00pm through digital method or power-point presentation.

According to a competent source at the Ministry of Finance, the target for the GDP growth seems to be set at 7.1 %, down from 7.3 % in the outgoing fiscal year.

The GDP growth rate for the last couple of years is hovering over 6 % on average. Even in the outgoing fiscal year, it is expected to be 6.51 %. The next budget is also likely to set the target of containing inflation within 6.2 %.

The development budget for the new fiscal year or the ADP has already been fixed at Tk97,000 crore while the non-development expenditure would stand at around Tk1,76,000 crore.

The size of the next national budget is likely to stay below Tk3 lakh crore mark as it is expected to be around Tk2,97,100 crore of which the budget deficit would be around Tk88,657 crore—5 % of the Gross Domestic Product.

To finance this huge and ambitious budget, the government has made an estimation of overall revenue collection of around Tk2,10,443 crore of which around Tk1,77,370 crore would come from the National Board of Revenue (NBR), Tk6,500 crore from non-NBR tax revenue and Tk27,345 crore from non-tax revenue.

To meet the budget deficit, the Finance Ministry official said the government would have to depend more on the domestic bank borrowings as its target in the FY16 budget has been set at around Tk38,623 crore while around Tk18,000 crore is likely to come from the domestic savings certificates. The rest of the deficit financing would come from the foreign sources.

The new budget is likely to come up with a set of new features as well, including announcement for a separate budget for children, expanding the district budget, outline for forming a separate bank for the public servants, announcement for Palli Sanchay Bank to facilitate the rural people to go for savings, reducing the corporate tax for the businesses, including that of the banking sector, special stimulus for the capital market alongside various facilities to woe more investment, including providing tax holiday facility, to the entrepreneurs.

Besides, there will be specific directions in the budget speech of the Finance Minister towards implementation of the Padma Bridge Project, construction of a tunnel beneath the River Karnaphuli in Chittagong, Tunnel beneath the River Buriganga, metro rail project and construction of double rail line on Dhaka-Chittagong route.

The next budget is giving the highest importance to human resource development sector with increased allocation while the Ministries of Defence, Home, Education, Agriculture, power, Road Transport and Bridges and Health are also set to get higher allocations considering the growing demand.

The new budget for FY16 would have announcement for implementation of the new pay scale for government officials and employees for which the Finance Minister would have to feel the pinch for collecting the fund for meeting the additional demand of salaries and allowances of the public servants.

The proposed budget for the next financial year is likely to slash the subsidy expenditure of the government and expand the coverage of social safety net programme moderately by taking advantage of the cheap fuel oil prices on the international market and planned hike in tax rates on apparel exports.

Another official at the Finance Ministry hinted that the corporate tax for the publicly traded companies (listed with the capital market) is likely to come down at 25 % from the existing 27.5 % while that of the banks, insurance companies and financial institutions (except merchant banks) at around 40 % from the existing level of 42.5 %. However, the tax on the publicly and non-publicly traded cigarette manufacturing companies is unlikely to witness any change.

The individual tax free ceiling is likely to be increased to Tk2,50,000 from the existing Tk 2,20,000 with the minimum tax to be raised to Tk4,000. Besides, the individual tax free ceiling for the women and elderly citizens above 65 years is likely to be made Tk3,00,000 from the existing Tk 2,75,000 while that of the physically challenged people to Tk3,75,000 from the existing ceiling of Tk 3,50,000.

The new budget would also propose a tax-free income of Tk4,25,000 for the gazetted wounded freedom fighters up from the existing Tk4,00,000.

It is also likely to withdraw the provision of 10 % fine for whitening undisclosed money since the facility is yet to draw any good response. The government has also decided to allocate only Tk2,000 crore for public -private partnership (PPP) initiatives in the next fiscal year.

Besides, the Finance Minister is likely to increase the tax at source for the RMG sector while there would be increased duty on Biri and tobacco. The SIM tax on the mobile phone operators is likely to be increased, too.

The Finance Minister will hold a post-budget press conference on Friday at about 4:00pm at the Osmani Memorial Auditorium in Dhaka.