Next budget to be 12pc bigger
The government is set to present a 12 percent bigger budget for fiscal 2023-24, the last of the Awami League government's present tenure, as it looks to juggle austerity and growth ambitions.
"The proposed budget size for the upcoming fiscal year is not that big," Planning Minister MA Mannan told The Daily Star yesterday.
Were the economic conditions the same as in pre-pandemic years, the budget size would have been Tk 8-9 lakh crore.
"But we are in a tight situation. So, the budget size has decreased."
Besides, progressively bigger budgets are presented every year only for funds to remain unspent at the end of the fiscal year.
"We want to implement the budget fully," he added.
Of the total budget of Tk 759,955 crore, the highest allocations have been kept for interest payment and subsidy expenditure, The Daily Star has learnt from finance ministry officials involved with the proceedings.
Two separate meetings of the Fiscal Coordination Council and Resource Committee were held yesterday to discuss the upcoming budget. Both meetings were presided over by Finance Minister AHM Mustafa Kamal.
The targets for revenue earning, budget deficit and social spending would be set in line with the International Monetary Fund's prescription.
But the budget size and the others targets will be finalised by Prime Minister Sheikh Hasina.
"They [IMF] have some recommendations as they are our friend and a think-tank. We think that what they are saying is for our good. They can ask us to reduce subsidies. But subsidy for some sectors like agriculture is very much needed for food security," Mannan said.
The target for GDP growth is likely to be 7.5 percent, much higher than the forecasts of multilateral lenders.
In the latest edition of the Asian Development Outlook, the Asian Development Bank said GDP growth is projected to slow to 5.3 percent this fiscal year and then edge back up to 6.5 percent in fiscal 2023-24.
Similarly, the World Bank in its latest publication 'South Asia Economic Focus, Expanding Opportunities: Toward Inclusive Growth' said real GDP growth in fiscal 2022-23 will decelerate to 5.2 percent and then bounce back to 6.2 percent next fiscal year.
"The GDP growth target is achievable. We know many learned people are not agreeing with us. But we will not argue with them. There are challenges, but I think we have enough economic strength to face those," Mannan said.
The inflation target for the next fiscal year would be 6 percent, up from this fiscal year's target of 5.6 percent.
Both the ADB and the WB forecasted inflation to be upwards of 6 percent next fiscal year. The WB's projection is 6.5 percent and the ADB's is 6.6 percent.
The budget for the annual development programme would be Tk 263,000 crore, up 6.9 percent from this year's allocation.
The allocation for interest payment will be 27 percent more at Tk 102,376 crore on the back of the depreciation of the taka.
"For the same reason, the allocation for interest payment rose by Tk 9,638 crore in this year's revised budget," said a finance ministry official.
Subsidy expenditure was also increased in the revised budget and will increase in the upcoming budget too.
In the original budget for this year, Tk 81,000 crore was kept for subsidy expenditure; it was topped up by Tk 21,000 in the revised budget.
In fiscal 2023-24, subsidy expenses would take up Tk 100,134 crore.
The total revenue collection target would be Tk 500,000 crore, which is 15 percent more than this fiscal year's.
Of the sum, the National Board of Revenue has been tasked with fetching Tk 430,000 crore, which is 16.2 percent more than this year.