Finance Minister AHM Mustafa Kamal on Thursday placed a Taka 7,61,785 crore budget in Jatiya Sangsad for the next fiscal year (FY24) eyeing a 7.5 percent GDP growth rate with an expectation of keeping annual inflation at around 6.0 percent.
“Inspired by the patriotism of Prime Minister Sheikh Hasina as well as by her genuine love and responsibility towards the people of the country and unwavering support of the people, we can confidently say that a hunger and poverty-free, knowledge-based and developed 'Smart Bangladesh' by 2041 is not a distant dream. Bangladesh will march ahead and reach the pinnacle of prosperity defying all odds,” Kamal said in his budget speech.
The budget eyes a 7.5 percent GDP growth rate in the next fiscal year (FY24) since the country is expected to return to higher growth trajectory by way of investing in the productive sectors and stimulating productivity and domestic demand, said the minister.
He said the annual inflation is expected to remain much controlled in the next fiscal year due to the decrease in the prices of fuel, food, and fertilizer in the global market, along with the adjustment of fuel prices in the domestic market and government initiatives to keep the food and supply systems normal.
He said the proposed budget for FY24 is 15.2 percent of the GDP. The total size of the revised budget for the outgoing fiscal year (FY23) was Taka 6,60,507 crore.
The total size of GDP in the next fiscal year has been estimated at Taka 50,06,782 crore which was Taka 44,39,273 crore in the revised budget of the outgoing fiscal year.
The lower inflation trend is expected due to the decrease in the prices of fuel, food, and fertilizer in the global market, along with the adjustment of fuel prices in the domestic market and government initiatives to keep the food and supply systems normal.
Kamal wearing a traditional Panjabi and Pajama with a black ‘Mujib coat’ placed his 248-page budget speech titled “Towards Smart Bangladesh Sustaining the Development Achievements in a Decade and a Half” featuring power-point presentation for more than two hours that lasted till 5:13 pm in presence of leader of the house and Prime Minister Sheikh Hasina.
He said indomitable in adversity, confident and creative people are the sources of endless inspiration for Bangladesh. People of all professions and ethnic groups who are building Bangladesh with their sweat and blood are its asset and life force.
The Finance Minister said the economy of Bangladesh is gradually and surely becoming a global phenomenon with the whole-hearted endeavor of all. “The budget for the fiscal year 2023-24 has been crafted around the hopes and aspirations of the people of all strata,”
The budget session was resumed on Thursday with Speaker Dr Shirin Sharmin Chaudhury in the chair.
This proposed budget is the country's 52nd budget and the 24th of the Awami League government in five terms.
This budget for FY24 is also the 5th consecutive budget of incumbent Finance Minister AHM Mustafa Kamal.
The budget will be passed in parliament on June 26, a bit earlier than the usual tradition because of the holidays of Eid Ul Azha.
The Finance Minister proposed to allocate a total of Taka 4,36,247 crore to operating and other sectors and Taka 2,63,000 crore to the Annual Development Programme.
In the proposed budget for FY24, the total revenue is estimated at Taka 5 lakh crore. “Out of this, I propose to collect Tk 4 lakh 30 thousand crore through the National Board of Revenue and Tk 70 thousand crore from other sources,”
The overall deficit in the proposed budget will stand at Taka 2,61,785 crore, which is 5.2 percent of GDP. It should be noted here that the deficit rate was 5.5 percent in the previous budget.
Out of the total deficit, Taka 1,55,395 crore are proposed to be financed from domestic sources and Taka 1,02,490 crore from external sources.
While formulating the budget, Kamal said the government prioritized poverty alleviation, contemporary economic challenges and future development initiatives.
He said new sectors of revenue collection will be focused on to ensure an adequate supply of resources while the dependence on external debt will be reduced gradually to address the budget deficit. “Subsidies/incentives in various sectors will be rationalized to ensure rational resource mobilization,”
He said the government has laid emphasis on modernisation of agriculture adding that the use of technology in every sector has also been emphasized.
“Priority has been given to build physical, social as well as technological infrastructure which is suitable for the Fourth Industrial Revolution to pave the way for building a smart society, smart citizen, smart government and above all, smart economy. We hope that the implementation of this budget will make the economy stronger and sustainable,” he noted.
Outlining a series of measures for overcoming the budget deficit, the Finance Minister said the main focus of the fiscal policy and strategy would be to mobilise internal resources, increase efficiency in expenditure management and find out cost-effective financing sources from home and abroad to meet the challenges of the post LDC graduation period.
“We want to harness all potentials of generating revenues. Tax revenue will be significantly increased through expansion of tax net by simplifying the return submission process and other reforms, rationalisation of tax exemptions, establishment and expansion of electronic fiscal device (EFD) to support value added tax collection in an automated and transparent manner, online VAT registration, automation of tax administration, etc.” he added.
Kamal informed that the NBR is preparing a 'Medium Term Revenue Collection Strategy (MTRS)' to help achieve the revenue collection targets in the medium term while income tax and customs laws are being modernised.
Considering sector-wise budgetary allocations in FY24, the physical infrastructure sector received the highest allocation of Taka 2,24,108 crore followed by social infrastructure sector with Taka 1,91,908 crore, general services Taka 1,62,570 crore, interest payments Taka 94,376 crore, PPP subsidy and liability Taka 79,901 crore and net lending and other expenditure Taka 8,922 crore.
In terms of ministry and division-wise allocation, the Finance Division received the highest allocation of Taka 2,31,211 crore followed by the Local Government Division Taka 46,705 crore, Secondary and Higher Education Division Taka 42,839 crore, Ministry of Defense Taka 42,095 crore, Ministry of Primary and Mass Education Taka 34,722 crore, Road Transport and Highways Division Taka 39,710 crore, Power Division Taka 33,825 crore.
To give some relief to the taxpayers from the inflationary pressure, the Finance Minister proposed increasing the tax-free income limit to Tk 3.5 lakh from the existing Tk 3 lakh for individual taxpayers for 2023-24 fiscal year.
Besides, the tax-free income threshold for women and senior citizens above 65 years of age has also been increased to Tk 4 lakh from Tk 3.5 lakh.
However, Taka 2,000 minimum income tax has been proposed although the income of the taxpayers is not taxable while corporate tax rates will remain unchanged.
Priority has been given to build physical, social as well as technological infrastructure which is suitable for the Fourth Industrial Revolution to pave the way for building a smart society, smart citizen, smart government and above all, smart economy.
The National Board of Revenue (NBR) has proposed withdrawing supplementary duty (SD) on 234 imported goods and regulatory duty (RD) on 191 imported goods in fiscal year 2023-24 to aid Bangladesh's graduation from a least developed country (LDC) to a developing one by 2026.
These products include imported fish like tilapias, catfish, carp, eels, Alaska pollack, rays and skates, seabass, animal meat and hair, food items and garments item like T-shirt, fabrics, tie, trousers, suits, jackets, artificial fabrics, underpants, chemicals and cosmetics.
In the next three consecutive budgets, the government will also lift 1,200 to 1,300 types of supplementary duties to reduce trade barriers in import and export between Bangladesh and other nations after the country's graduation.
There are around 7,000 types of tariffs on the import of goods including 1,926 supplementary and regulatory duties.
While placing the proposed national budget for the 2023-24 fiscal year today, Finance Minister AHM Mustafa Kamal has proposed changes to duties on different products, which will result in increase and decrease in their prices.
The government also plans to roll out the universal pension scheme in the coming fiscal year.
The Universal Pension Management Act, 2023 has already been passed and Finance Minister AHM Mustafa Kama today said he hoped to roll out the scheme from FY2023-24.
Under the proposed scheme, a beneficiary can enjoy pension benefits subject to the payment of subscription up to the age of 60 years if he or she enrols at the age between 18 to 50 years, whereas those who enrol at their age of more than 50 years have to pay a subscription for a minimum of 10 years.
The expatriate Bangladeshi will be able to participate in this scheme.
Highlighting achievements of the country over the last 14 and a half years under the strong leadership of Prime Minister Sheikh Hasina, Kamal said Bangladesh has been identified as a 'global role model' of development for other countries.
During this period, the GDP size exceeded US$ 460 billion; Bangladesh has become the 35th largest economy in the world. It is estimated that Bangladesh will be included in the list of the top 20 economies of the world before 2041.
He said in our 'Smart Bangladesh', the per capita income will be at least US$ 12,500; less than 3 percent of people will be below the poverty line and extreme poverty will be reduced to zero; inflation will be limited between 4-5 percent; budget deficit will remain below 5 percent of GDP; revenue-GDP ratio will be above 20 percent; investment will be 40 percent of GDP.
“We will achieve 100 percent digital economy and science and technology-based literacy. Healthcare will reach everyone's doorstep. All the services required by the citizens will be at their door steps, including automatic communication system and sustainable urbanisation. A paperless and cashless society will be created. Most importantly, a society based on justice and equality will be established in Smart Bangladesh,” he hoped.