Tk 750b revenue shortfall to widen current fiscal’s budget deficit: CPD

CPD executive director Fahmida Khatun presented periodic review of the Bangladesh Economy at the think-tank's office in Dhanmondi on Saturday

The Centre for Policy Dialogue (CPD) on Saturday said revenue shortfall would be approximately Tk 750 billion (75,000 crore) in the current fiscal year (2022-23), causing the budget deficit to widen.

"The government borrowed Tk 54,501 crore (545 billion) from the Bangladesh Bank until February and media report the borrowing from the central bank rose to Tk 74,393 crore (Tk 744 billion) until April of this fiscal year, this brings a negative impact on the macroeconomy," it said.

CPD hinted that the government borrowing from a domestic source (bank) will create inflationary measures in the economy. Rather it suggests the government should prioritise mobilising foreign-funded budgetary support.

CPD executive director Fahmida Khatun presented the think-tank's periodic review of the Bangladesh Economy, this being the third of the 2022-23 fiscal, at CPD's office in Dhanmondi on Saturday.

Although the price of fuel is falling in the international market, its effect is not seen in the domestic market, she pointed out.

CPD said BPC's total profit in the last seven years from FY2015-16 to FY2021-22 was about Tk 438 billion (43,804 crore). After paying Tk 77 billion (7,727 crore) as income tax, BPC's net profit was Tk 361 billion (36,074 crore).

Being a monopoly and state-owned enterprise, enjoying windfall gains by penalising the citizens of the country cannot be justified, it said.

The think tank suggested the government look into the surge of inward remittance from the USA instead of the Middle East, where a large number Bangladeshi expatriates are working.

The think tank said in 10 months of FY 2021-22 (July-April), around USD 3.86 billion remittances came in the country from Saudi Arabia, but in the same period of the current financial year, remittances decreased to $3.04 billion.

CPD suspects the sudden increase in remittances from the USA is recycling of smuggled money that was sent from Bangladesh to America in different shapes of trade-based money laundering.

It suggested cutting on duty of daily essential products used by common people temporarily as a relief to reduce price. In that case market monitoring is also necessary.

The scope of direct assistance to the poor needs to be increased, thinks the CPD. It is also necessary to ensure that the right people are getting it, the think tank added.

Export growth rate is not positive and falling short of target, it noted. In May and June (Last two months of the current fiscal year) it should be increased by 41 per cent, which is very difficult.

Distinguished fellow Mustafizur Rahman, research director Khondaker Golam Moazzem Hossain, senior research fellow Tawfiqul Islam Khan, among others, spoke on the different issues.