Tk 5.94tn budget likely as govt eyes increased outlay on goods, services

The government allocation for public expenditure on goods and services will witness a significant rise in the coming years after a slight dip in the last couple of years, reveals a government document.

The government has estimated to spend Tk 401.3 billion, which is 6.6 per cent of the budget, for public expenditure in the coming 2021-22 fiscal.

The country is likely to get Tk 5933.14 billion budget for 2021-22 fiscal, which is Tk 253.14 billion higher than the current year, aiming to face the Covid-19 pandemic challenge for recovery of the economy.

The estimation on goods and services for 2022-23 fiscal has been set at Tk 465.2 billion, which will be 6.7 per cent of the budget.

According to an official document, the allocation for the purpose in the running 2020-21 fiscal is Tk 350 billion or 6.1 per cent of the budget.

The document also reads that the government has estimated to bring down its expenditure in current account, including purchase of product and service, while increase the capital expenditure in the next two fiscals.

It said that the current expenditure for 2021-22 and 2022-23 fiscal has been estimated at 54.4 per cent and 54.5 per cent of the total budget respectively.

As per the document, the government allocation for expenditure can be divided in current expenditure and capital expenditure.

Salaries and allowances of government employees, purchase of product and service, compensation and relocation expenses, payment of interest against foreign and domestic loans - these are all found under the current expenditure category. “Food accounts” and “expense for structural coordination” are also under this expenditure.

On the other hand, capital expenditure is an expense that leads to the creation of new productive assets and inclusion. It is akin to investment, so government-funded projects and project components in the annual development programme (ADP), as well as non-ADP capital expenditure are the two main categories for capital expenditure.

Loans and advance payments, development programmes from revenue budget, projects outside the ADP and non-ADP Food for Work programme and handover expenses fall under this expenditure.

The document stated that in the revised budget for the 2019-20 fiscal, the allocation for public expenditure on products and services was Tk 322.1 billion, that is 6.5 per cent of the budget.

It also mentioned that in 2018-19 fiscal, the allocation was Tk 285.7 billion which was 7.3 per cent of the budget that year.

In the previous four fiscals i.e. 2017-18, 2016-17, 2015-16 and 2014-15 respectively, the allocations were Tk 234.8 billion (7.3 per cent of budget), Tk 205.49 billion (7.6 per cent), Tk 182.05 billion (7.6 per cent) and Tk 166.27 billion (8 per cent).

The document said that from 2014-15 fiscal to 2018-19 fiscal the allocation for public expenditure in product and service was near about 8 per cent.

Due to various government steps, like enhancement of transparency through introducing e-GP, development in public procurement management and others, the allocation for this sector can be delineated in the government budget process, the document said.

Amid the novel coronavirus crisis, the government has been working according to what it believes to be “a comprehensive plan” with four main strategies.

The four-pronged strategy entails discouraging luxury expenditures, prioritising government spending that creates jobs, creating loan facilities through commercial banks at subsidised interest rates for the affected industries and businesses, and finally expanding the coverage of the government’s social safety net programmes.