Finance minister to place Tk 7.97 tln budget for 2024-25FY Thursday

Finance Minister Abul Hassan Mahmood Ali is set to unveil a possible Tk. 7.97 trillion national budget for the next fiscal year (FY 2024-25) at the Jatiya Sangsad (national parliament) Thursday.

He will announce the budget amid the growing challenges of containing inflation, maintaining a sound foreign currency reserve, a stable exchange rate and generating more revenues.

This will be the country’s 53rd budget and the 25th of the Awami League (AL) government in six terms. This budget will also be the 21st under the rule of Prime Minister Sheikh Hasina in different terms.

Tajuddin Ahmad presented the country’s first budget as finance minister of the post-independence Bangabandhu government in 1972.

This budget for FY25 will be the maiden budget of incumbent finance minister AH Mahmood Ali.

Career diplomat Ali, who previously served the cabinet as the minister for disaster management and relief and the minister for foreign affairs, would eye building a ‘Smart Bangladesh’ despite various obstacles and adversities.

The theme of the budget for the next fiscal year would be “Pledge towards building a happy, prosperous, developed and smart Bangladesh” in pursuit of turning the country’s economy into its previous sound state.

Amid the global volatile conditions and adversities, the finance minister is eying a 6.75 per cent GDP growth while containing the inflation at 6.5 per cent although the general point to point inflation is still hovering slightly below the double digit mark albeit various efforts from the government to tame inflation.

Finance ministry officials said the possible budget size of Tk. 7.97 trillion would be 4.6 per cent or likely around Tk. 352.15 billion higher than the budget of the outgoing fiscal year (FY24). The country’s GDP size has been estimated at Tk. 55,97,414 crore.

Apart from the already approved Annual Development Programme (ADP) outlay of Tk. 2.65 trillion, the possible budget will see an estimated deficit of Tk. 2.56 trillion excluding grants. If the grants are considered, then the overall budget deficit will stand at nearly Tk. 2.52 trillion.

As the government wants to lower expenses, it is likely to contain the budget deficit to 4.6 per cent of the gross domestic product in the next fiscal year. The government usually keeps the budget deficit at around 5 per cent.

In the current fiscal year (FY24), the budget deficit is Tk. 261,785 crore.

Apart from the original ADP allocation of Tk. 2.65 trillion, Tk. 59.43 billion is likely to be allocated for schemes, Tk. 76.27 billion for special projects outside the ADP and Tk. 28.84 billion for the food for work programme.

The officials said the government this time is neither pursuing a high and ambitious growth nor taking fresh mega projects.

Besides, there will be added pressure on repaying principal amounts and interests against foreign loans for which the National Board of Revenue (NBR) would put higher emphasis on generating more revenues.

To face the expenditure pressure, the government will eye to realise overall revenue of Tk. 5.41 trillion of which the NBR alone would be entrusted with collecting Tk. 4.8 trillion which is Tk. 500 billion higher than the outgoing fiscal year.

Apart from the NBR, the government will strive to collect Tk. 150 billion as non-NBR revenue while Tk. 460 billion as non-tax revenue.

Besides, Tk. 44 billion is expected to come as foreign grants.

Finance Division officials familiar with the process of budget formulation said that apart from containing inflation, the priorities of the next budget will include returning the economy into its previous stable state, keeping the prices of commodities within the purchasing power of the common people and maintaining decent living standards by citizens.

The fresh budget will see various austerity measures for reining in public expenditure alongside boosting the farm productivity and keeping the supply chain normal.

Besides, steps towards continuous monitoring of markets to contain inflation, increasing the coverage of the social safety nets, measures for automatic adjustment of fuel oil in line with the global market would help put a positive impact on inflation.

The next budget features a good number of initiatives that include ensuring food for all, improvement in food supply system, widening the coverage of the social safety nets, modernising every village, ensuring digital health and education system, fast track infrastructure projects, facing the climate change impact and global adversities.

To meet the budgetary expenditure, the government eyes borrowing of around Tk. 1.27 trillion from foreign sources of which Tk. 365 billion will be spent as repayment of foreign loans. The net foreign loan is likely to stand at Tk. 907 billion.

On the other hand, the government is likely to borrow Tk. 1.61 trillion from domestic sources, including Tk. 1.37 trillion from the banking system and Tk. 234 billion as loan from the non-bank sources.

The government is also likely to earmark an allocation of around Tk. 5.07 trillion as its operating cost, Tk. 930 billion as interest payment of local loans and Tk. 205 billion as interest payment of foreign loans, Tk. 379.89 billion as capital expenditure, Tk. 1.19 billion for food account and Tk. 84.57 billion as loan and advance.

To widen the VAT net, the NBR will beef up its operations to set up EFDs in Dhaka and Chattogram.

Besides, in order to detect newer taxpayers, the NBR has a plan to work with the BRTA, DPDC and city corporations in an integrated manner.

The government is also likely to make mandatory submission of e-challans in case of VAT payment of Tk. 2 million and above while the current ceiling is now Tk. 5 million. Besides, some 2.02 million people are likely to be included afresh in the social safety nets to cushion them from the impact of inflation.

Meanwhile, a finance ministry press release said that to make the budget more participatory, all the budget documents would be uploaded into the websites of the Finance Division www.mof.gov.bd the NBR www.nbr.gov.bd while anyone can read and download these documents while browsing those websites.

Besides, anyone from home and abroad can send their opinions and recommendations on the budget through the email [email protected].

The finance minister will hold a post-budget press conference on Friday at 3:00 pm at the Osmani Memorial Auditorium in the capital.