Tk2,61,785cr budget deficit likely in FY24

Staff Reporter :
The budget deficit for the next financial year of 2023-24 has been estimated at Tk 2,61,785 crore which is 5.2 per cent of gross domestic product (GDP).
Earlierin FY23, the gap between the total revenue collection and expenditure was estimated at 5.40 per cent of GDP. In the coming fiscal year, about 3 per cent of the deficit will be met through domestic borrowing.

The government is eyeing to borrow Tk1, 50,785 crore from domestic sources, including Tk1, 32,395 crore from the banking system. This will be the second time in a row that borrowing from the banks likely to cross Tk 1 lakh crore. Another Tk 1,10,785 crore will be borrowed from foreign sources.

With keeping in mind various risks in macro economy including the severe inflationary pressure caused in the domestic economy, downward trend of revenue collection , huge arrears
of subsidies, and the global economic instability, government is going to propose the election year budget for the upcoming fiscal year of 2023-24 on Thursday next.
The possible budget size of Tk7,61,785 crore would mainly aim at taming inflation with attaining a growth rate of 7.5 per cent.
Apart from this, the government targets a possible revenue collection of Tk 5 lakh crore for next the budget depending heavily on indirect tax. The target is around Tk67, 000 crore more than the current financial year.

Out of the overall revenue collection target, the National Board of Revenue (NBR) is likely to be tasked with a collection target of Tk4.30 lakh crore while Tk 20,000 crore is likely to come from the non-NBR sources. Besides, the budget also aims to collect Tk 50,000 crore as non-tax revenue.
According to an official from (NBR) who wished not to be named said that the board plans to collect Tk 4.3 trillion in tax revenue in the next fiscal year. The target is to collect at least 64 per cent of it from indirect taxes, which are VAT and customs.

Meanwhile, Developed countries achieve at least 70 to 80 per cent of the total revenue target from direct tax while India, our neighbor, does at least 50 per cent.
However, in Bangladesh the contribution of direct tax for generating revenue is around 33 per cent only.
According to information gathered from NBR sources, the board proposed to set the target ratio at 36 per cent or Tk 1.54 trillion of the total targets for the next fiscal year of FY24.