Budgetary targets are far from reality : CPD

The proposed national budget for 2023-24 fiscal year has been formed on the basis of some assumptions that are far from reality, so peoples' sufferings may exacerbate because of high prices of goods, the Centre for Policy Dialogue (CPD) said today.

In the budget, the underlying assumptions pertaining to the key macroeconomic indicators appear to be far from reality, said Fahmida Khatun, executive director of the CPD.

"As a result, the budgetary targets set for the upcoming fiscal year are likely to be missed by a substantial margin."

The budget failed to address the most difficult challenge in the current reality: containing inflation, she added.

The targets of inflation, GDP growth rate, export earnings, revenue collection in the budget did not take cognisance of the current realities, she said.

Her comments came today in CPD's budget briefing where Fahmida Khatun presented a paper.

The shadow of conditionalities of the International Monetary Fund (IMF) was visible in the budget although the finance minister did not explicitly mention it in the budget speech, Fahmida Khatun said.

Overall fiscal framework continued to remain surreal as revised budget of the current fiscal year's targets did not take budget implementation progress into consideration, she added.

Towfiqul Islam Khan, senior research fellow of the CPD, said the government formed the budget on assumption of nine basic indicators—including revenue target, export target and inflation—all of which are very far from the reality.

The government's revenue target is around 39 per cent higher than the actual collection of the current year, so the government would need to borrow from banks to meet the deficit, he said.

As the banking sector remains in a liquidity crisis so the central bank will be the lender and it may rise the present inflationary pressure, Khan said.

On top of that, the government assumes that export, remittances and reserve will be boosted thus the taka will not depreciate further, he said.

As these assumptions are also not realistic so the further depreciation of the currency would create more pressure on the economy, he added.

Mustafizur Rahman, a distinguished fellow of the CPD, and Khondaker Golam Moazzem, research director, also talked at the event.