Tk 7.61 lakh crore budget for FY24 to be placed today

Anisur Rahman Khan :
Amid the ongoing economic crises across the globe because of various problems like COVID-19 pandemic, Russia-Ukraine war, IMF loan conditions and slow revenue income, the government is going to place the country’s 52nd national budget for the fiscal year 2023-24 over Tk 7.61 lakh crore in Jatiya Sangsad today.

Finance Minister AHM Mustafa Kamal is expected to table the budget targeting a total revenue of Tk 503,900 crore to meet the huge expenditure.
According to multiple sources, the government’s expenditure target has been fixed at Tk 761,785 crore, which is Tk 110,278 crore more than the current revised budget.

Though the government has set revenue target of Tk 503,900 crore to meet the huge expenditure and an additional Tk 67,637 crore has to be collected over the 2022-23 fiscal year to achieve the target, sources said.
However, the deficit between total revenue and expenditure has been kept at 5.2 per cent of GDP for the new fiscal year. Deficit budget (including grants) is Tk 257,885 crore.
This year’s budget will face a major pressure of the condition of the IMF as it should be implemented in the first year of lending.
The Finance Ministry has already finalised the budget for 23-24FY and it will be tabled before the Jatiya Sangsad by the Finance Minister after getting Cabinet approval today (Thursday).

It is expected that the budget is likely to be passed on June 25 after lengthy discussions as a proposed budget and new budget will be effective from July 1.
The title of the new budget is “Across the long journey of development towards Smart Bangladesh”. Smart Bangladesh is another step up in Digital Bangladesh. The Finance Minister will dream of Smart Bangladesh Vision 2041 despite the current crisis.
The GDP has been estimated at 7.5 per cent with high growth expectations despite there many challenges would have to face in the days to come during implementation of the new budget.

According to the budget document, the target of operational expenditure for the upcoming fiscal year is set at Tk 475,281 crore. Of the expenditure, recurring expenditure target is set at Tk 436,247 crore and expenditure for local interest is Tk 82,000 crore, foreign interest Tk 12,376 crore and capital expenditure Tk 39,034 crore.
Meanwhile, the target of annual development expenditure is set at Tk 277,582 crore. Of the amount, Tk 2,828 crore is given for the Food for Work (FFW) programme under the Disaster Management and Relief Ministry.

According to the budget document, the sources for meeting the deficits in the budget would be internal loans of Tk 155,395 crore. Of which, Tk 132,395 crore would be collected from banking sources and non-bank loans is Tk 23,000 crore.
In this draft budget, total gross domestic production is set at Tk 50,06,782 crore. Which was Tk 44,39,273 crore in the revised budget of the current fiscal year.
The IMF has a condition to gradually reduce debt from savings bonds. On the other hand, the foreign debt target is being increased at a massive rate to meet the shortfall in the government’s debt as a result of reducing the sale of savings bonds.

Sources said that Tk 18,671 crore more foreign loans will be taken in the next fiscal year than the target of the current fiscal year. And due to high indebtedness, more money will be required to pay the interest of domestic and foreign loans in the fiscal year 2023-24. Besides, the government’s capital expenditure is also increasing.
Controlling inflation remains a major challenge for the government and the Finance Division thinks that the prices of many products including fuel oil are already falling in the world market which will have a positive impact on inflation in the days to come too.

The total tax revenue collection target of Tk 450,000 crore has been set after calculating the additional collection of Tk 62,000 crore keeping it in mind. The revised budget tax revenue target for the current fiscal year is Tk 388,000 crore.
However, the government has a plan to increase the duty-tax or VAT on daily products to collect huge amount of revenue. The government is also under pressure to meet the conditions of IMF for taking a US$4.7 billion loan.

There are also announcements of some reforms, but sources said that the Finance Minister will not say anything regarding reforms in the budget speech about the conditions of the IMF.
But the economists hinted that it will be difficult to give a satisfactory budget in such a situation.
The Finance Minister is about to present the budget, the life of the low-income people has become complicated due to the rise in the prices of commodities. The average rate of headline inflation for the last six months (November 2022 to April 2023) stood at 8.91 per cent. In this reality, the Finance Minister has set the target of keeping this inflation at 6.5 per cent in the next fiscal year 2023-24.

On the other hand, when the government is on the way to reduce the flow of credit to the private sector through monetary policy to control inflation, the Finance Minister is going to set the total investment target for the next fiscal year at 33.8 per cent of GDP.
This budget for FY24 will be the 5th consecutive budget of incumbent Finance Minister AHM Mustafa Kamal.