Finance Minister AHM Mustafa Kamal is set to place the national budget of over Taka 7.61 lakh crore for the next fiscal year (FY24) at the Jatiya Sangsad today (June 1) with the main philosophy of turning Bangladesh into a happy-prosperous, developed ‘Smart Bangladesh’ by 2041.
This will be the country’s 52nd budget and the 24th of the Awami League government in five terms, reports BSS.
This budget for FY24 will be the 5th consecutive budget of incumbent Finance Minister AHM Mustafa Kamal.
The budget is expected to be passed in parliament on June 26, a bit earlier than usual because of the holidays of Eid Ul Azha.
According to a press release from the Ministry of Finance, the attainments of Bangladesh over the last one and a half decades under the Awami League government, have laid a solid foundation stone or sustainable groundwork for the country in the coming days.
The ‘Smart Bangladesh’ concept is based on four main pillars: smart citizens, smart government, smart society, and smart economy. "The budget for the next fiscal year (FY24) will be the first budget towards building ‘Smart Bangladesh’," added the release.
This budget will prioritise health, agriculture, food production, and management. Side by side, there will be various food-friendly programmes throughout the year. Besides, the coverage of the social safety nets will also be increased.
The possible budget size of Tk 7.61785 trillion would mainly aim at taming inflation alongside the higher GDP growth trajectory, said a Finance Ministry official.
The budget size is likely to be Tk 1.01278 trillion higher than the revised budget of Tk 6.60507 trillion in the outgoing fiscal year.
The official also said that the budget would not be ambitious or expansionary.
The Finance Minister is set to deliver his budget speech with the possible title "Unnayoner Dirgho Agrojattra Periye Smart Bangladesher Abhimukhe." The budget speech will feature 11 chapters.
Finance ministry officials said Kamal would present his vision on how to make a ‘Smart Bangladesh’ in his upcoming budget speech. The speech will cover building a smart country to cope with the 4iR.
The government this time is aiming to attain a growth rate of 7.5 per cent in the next fiscal year (FY24) while containing an inflation rate of around 6.5 per cent. The total investment target for the next year will be 33.8 per cent of the GDP.
The provisional estimate of the Bangladesh Bureau of Statistics (BBS) shows that the GDP has grown by 6.03 per cent in the outgoing fiscal year (FY23) and the inflation rate was 8.4 per cent till April.
The budget speech has been prepared with an emphasis on ensuring people’s employment through business expansion. The government will take initiatives to increase the investment of state-owned enterprises to create new jobs.
In his budget speech, the finance minister will reassure the countrymen about improving the country and transforming it into a smart one with visions to make smart roads for smart intellectuals.
Particularly, the focus will be on the ICT sector, power sector, and making smart citizens.
The next budget will be 12.34 per cent bigger than the current one.
It will be 15.21 per cent of the projected GDP of Tk 50.06682 trillion, compared to 15.27 per cent in the current fiscal year. This shows that the next budget is not ambitious.
Officials said the government targets a possible revenue collection of Tk 5.03900 trillion, around Tk 670.00 billion more than that in FY23.
Out of the overall revenue collection target, the NBR is likely to be tasked with a revenue collection target of Tk 4.3 trillion while Tk 200 billion is likely to come from non-NBR sources. Besides, the budget also aims to collect Tk 500 billion as non-tax revenue.
The government has already approved a Tk 2.63 trillion Annual Development Programme (ADP) for the next fiscal year (FY24) of which Tk 1.69 trillion (64.26 per cent) will come from local sources while the rest of Tk 940 billion (35.74 per cent) will come from the foreign sources.
Considering the allocations against the autonomous bodies and corporations, the overall estimated development expenditure in the next fiscal year would stand at Tk 2.77582 trillion.
Out of the major expenditure, Tk 4.75281 trillion will likely be kept as operating costs, of which Tk 943.76 billion will be spent for interest payments and Tk 390.34 billion as capital expenditure.
Besides, the government also plans to spend Tk 800 billion on bearing the salaries and expenses of the public servants, Tk 1.1 trillion on subsidies, and Tk 1.26272 trillion on social safety nets.
Finance Ministry officials hoped that an amount of Tk 1.2719 trillion would be available as a foreign loan alongside Tk 39 billion as a foreign grant. The target for realising net foreign loans in the outgoing fiscal year was Tk 954.58 billion.
The government will also likely borrow Tk 1.32395 trillion from the banking sector in the next budget to meet the deficit financing, of which most of the amount will be short-term loans. The target for borrowing from the banking sector in the current fiscal year was Tk 1.06334 trillion.
The target for realising net loans from the savings certificates in the next budget is likely to be set at Tk 180 billion, which was Tk 350 billion in the original budget of the current fiscal year. This target has been downsized since there is a downtrend in the sales of savings certificates.
The overall size of the Gross Domestic Product (GDP) in the next fiscal year is likely to be set at Tk 50.06682 trillion, which was Tk 44.39273 trillion in the revised budget of the outgoing fiscal year.
The overall deficit in the next budget is likely to be Tk 2.61785 trillion, which is 5.2 per cent of the GDP.
To meet the deficit, the government plans to borrow Tk 1.55395 trillion from domestic sources, including Tk 1.32395 trillion from the banking system.
Higher allocations will be made for subsidies, more than Tk 1.1 trillion, and for interest payments, around Tk 1.02 trillion. In the current fiscal year, the allocation for subsidies was around Tk 810 billion, and for interest payments, around Tk 800 billion.
The allocations are being raised to soften the blows of high commodity prices in the international market and the depreciation of the taka.
The government will also likely continue the austerity measures in the next fiscal year to reduce pressure on foreign reserves.
To achieve the revenue collection goal, several measures, including the recruitment of private agents across the country, have been taken to increase the number of taxpayers.
The finance minister will also announce an increase in the allocation and number of beneficiaries in the social security sector, following the instructions of the prime minister.
The Finance Ministry release said that to make the budget more participatory, all the budget-related documents will be available on the website of the Finance Division, www.mof.gov.bd.
