Dhaka: Finance Minister AMA Muhith placed Tk 2,95,100 crore budget for the 2015-16 fiscal year in Parliament on Thursday.

In the proposed budget, the target of gross domestic product (GDP) growth has been set at 7%.

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 3.30pm with Speaker Shirin Sharmin Chaudhury in the chair.

This is the country’s 44th national budget while the 16th budget of the Awami League government and the 9th for Muhith.

The budget is around 81.22% bigger than the current fiscal year’s revised budget.

The revenue collection target for the next fiscal year has been set at Tk 2,08, 443 crore, which is 12.14% of GDP, of which NBR tax revenue is Tk 1,76, 370 crore. Revenue from Non-NBR sources has been estimated at Tk 5,874 crore. In addition, Tk 26, 199 crore will be collected as Non-Tax Revenue.

Annual Development Programme (ADP)

Tk 97,000 crore has been allocated to the Annual Development Programme (ADP), which is 5.7% of total GDP, and Tk 22,000 crore more than the current fiscal year.

Budget deficit

The budget deficit for the next fiscal year is Tk 86, 657 crore, which is 5% of total GDP. Tk 30,134 crore or 1.8% of the budget will be drawn from the foreign sources, and Tk 56,523 or 3.3% will be collected from non-bank borrowing. Bank borrowing is Tk 38,523 crore, which is 2.2% of GDP

In the current fiscal year’s budget, primarily it was mentioned that Tk 24,275 crore would be collected from external sources. However, in the revised budget plan it has been reduced to Tk 21,583 crore.

Since the proposed budget for FY 2015-16 is a lofty one, enough money may not be available from foreign sources. In that case, government will have to rely on the commercial banks to balance the deficit budget. Independent entrepreneurs will receive fewer loans. Since the government will have to borrow money from Bangladesh Bank, that will increase the inflation.     

Inflation target

Inflation rate for the next fiscal year has been set at 6.2%. Currently, the inflation rate, which is falling, is 6.6% until April 2015.