Subsidies likely to continue in FY24-25
Staff Reporter :
Bangladesh’s upcoming budget for fiscal year 2024-25 (FY2024-25) prioritizes navigating the country’s current economic challenges.
Key areas of focus include continued subsidies as essential sectors like agriculture and electricity are expected to maintain necessary subsidies despite a potential contractionary budget, curbing inflation as the government aims to implement measures to reduce inflationary pressures impacting citizens, employment generation with strategies to boost job creation, discouraging luxury imports and efforts to attract increased FDI are planned.
A special meeting at the Prime Minister’s Office, attended by Finance Minister Abul Hasan Mahmud Ali, State Minister for Finance Waseqa Ayesha Khan, Bangladesh Bank Governor Abdur Rouf Talukder, and Finance Ministry Secretary Dr. Md. Khairuzzaman Mojumder, among others, charted the course for the upcoming budget.
Anticipating slower economic activity and the need to manage foreign currency reserves, the budget is expected to be contractionary, with cautious spending.
However, a proposed size of Tk 7,97,000 crore (approximately $93.8 billion USD) is under consideration, representing a 4.9 percent increase from the current fiscal year. This marks a significant shift from the historical trend of 12-13 percent annual growth in budget size.
State Minister for Finance Waseqa Ayesha Khan highlighted key priorities such as controlling inflation will be a top priority in the next budget, the government intends to increase the number of beneficiaries under social security programs to provide relief to low-income earners.
Authorities are reviewing tax exemption policies, particularly for sectors that have enjoyed extended benefits.
The aim is to encourage these sectors to focus on export-oriented growth. While the overall budget might be tighter, essential sectors like agriculture and electricity are likely to continue receiving necessary subsidies.
The estimated revenue sources for the proposed budget include Tk 5.40 lakh crore (approximately $63.6 billion USD) from tax revenue, Tk 2.57 lakh crore (approximately $30.3 billion USD) from foreign aid and loans, temaining amount from non-tax revenue sources.
