Govt unveils Tk 761,785cr national budget for FY24
Staff Reporter :
Finance Minister AHM Mustafa Kamal unveiled a proposed budget of Tk 761,785 crore for the upcoming fiscal year (2023-24) with a big deficit in the National Parliament on Thursday. This is Kamal’s fifth budget and the 52nd budget of the Bangladesh government.
Realizing the deficit, domestic and foreign debt dependence will be increased in next year and the proposed budget will also increase pressure on common people as the cost of living would go up.
The budget has mainly been prepared in line with the loan conditions of the International Monetary Fund (IMF). Following this, subsidies in people-oriented sectors have been declined in the proposed budget.
Besides, the government has proposed to impose taxes in new sectors and withdrawn the existing tax exemption from various sectors to increase revenue collection. As a result, prices of many essential commodities will increase further.
The proposed budget is 15.2 per cent of the Gross Domestic Product (GDP). Of the total proposed budget, Tk 475,281 crore is allocated for operating expenditures, and the rest, Tk 277,582 crore for development purposes.
The total revenue earnings have been estimated at Tk 500,000 crore for the coming fiscal year. Of this, NBR will collect Tk 430,000 crore, and the rest will be collected from other sources.
The overall deficit, including grants, in the proposed budget has been projected Tk 261,785 crore, which is 5.2 per cent of the GDP. Out of the total deficit, Tk 155,395 crore will be financed from domestic sources, Tk 102,490 crore from external sources and Tk 3,900 from grants.
In the proposed budget, the country’s GDP growth has been projected at 7.5 per cent for the coming fiscal year.
“On the whole, we expect to return to higher growth trajectory and achieve a 7.5 percent GDP growth in the coming fiscal year, by way of investing in the productive sectors and stimulating productivity and domestic demand,” Kamal said during the budget speech in parliament.
“To achieve the growth target, we will gradually come out of the contradictory policy and invest in ongoing and new growth-inducing projects including the mega-projects. For this purpose, the budget of the next fiscal year has set a higher target of raising the public investment to 6.3 percent of the GDP,” the finance minister said.
“At the same time, investment will continue to be facilitated in economic zones with an investment-friendly environment consisting of various facilities such as undisputed land, improved infrastructure, uninterrupted utilities, financial incentives and ease of doing business, etc,” he added.
In the proposed budget, Tk 38,052 crore has been allocated for the health and family welfare sector.
Allocation for the social safety net programme has increased by 11 percent year-on-year for the upcoming fiscal year. A total of Tk 126,272 crore, up from the current fiscal year’s Tk 113,576 crore, has been proposed in the sector for the next fiscal year. The proposed allocation is 16.58 percent of the total budget and 2.52 per cent of the gross domestic product.
The finance minister proposed for increasing the monthly allowance for the elderly by Tk 100 to Tk 600 and for widowed, deserted and destitute women by Tk 50 to Tk 550. The number of beneficiaries in both categories has been increased by 100,000, taking the total to 5.801 million and 2.575 million respectively.
Though, the monthly allowance for physically challenged people has been kept the same at Tk 850, the number of beneficiaries has been proposed to be increased by 535,000 to 29 lakh.
On the other hand, Tk 35,374 crore for the agriculture sector (agriculture, food and fisheries and livestock) has been proposed in the budget, which was Tk 33,698 crore in the current fiscal year.
In the proposed budget, Tk 42,838 crore has been allocated for the secondary and higher education sector, while Tk 34,722 crore for primary and mass education for the coming fiscal year.
Besides, an allocation of Tk 34,819 crore for Power and Energy sector has been proposed for next fiscal year. In the current FY2022-23, there was an allocation of Tk 26,066 crore in this sector.
In budget speech, the finance minister said, “Strategies to deal with sustainable transition and post-transition realities from LDCs in the days ahead need to be determined now.”
He also said the dream of Smart Bangladesh will be realized based on four main pillars – smart citizens, smart government, smart society and smart economy.
The per capita income will be $12,500 when the country would turn into “Smart Bangladesh,” the finance minister said. He also said that less than 3 per cent of people of Bangladesh will be below the poverty line and extreme poverty will be reduced to zero by then and inflation will be limited between 4-5 per cent.
Overall the current challenges are to control inflation, improve the current account balance situation and stabilize the foreign exchange rate, Kamal said.
In particular, he said, tariff rationalization, domestic resource mobilization to meet the fiscal deficit, withdrawal of subsidy or cash assistance or exploring alternatives should be considered now.
Adequate growth in revenue as a percentage of the GDP, ensuring efficiency in government spending and facilitating bilateral and multilateral financing, and attracting domestic and foreign investment should be focused on for the provision of necessary resources to meet social security expenditure and carry out essential development activities, said the finance minister.
