The national budget of Tk 797,000 crore for the upcoming fiscal year 2024-25, the first budget of the Awami League government which assumed power for the fourth consecutive time in January this year, will be placed in the Jatiya Sangsad at 3:00pm today.
Finance Minister Abul Hassan Mahmood Ali will place the budget in presence of Prime Minister Sheikh Hasina. In the budget speech titled, Commitment to building a happy, prosperous, developed and smart Bangladesh (in the international context), he will highlight that inflation and the global context have put pressure on the countrys economy.
Earlier on the day, the Tk 797,000 crore national budget will be placed before the Cabinet in the Cabinet conference room at Jatiya Sangsad for final approval.
This years budget is around Tk 82,582 crore higher than the revised budget of the outgoing fiscal year. The revised budget was Tk 714,418 crore and original budget was Tk 761,785 crore in outgoing fiscal year.
Finance Ministry sources said following the advice of the IMF, the government has not increased this years budget much to get rid of the global and internal economic crises.
However, the length of the budget speech has increased. The 2023-24 budget speech was 248 pages long while it is 329 pages for the Finance Minister this year. The ratio of budget increased in the outgoing fiscal was 12-15 per cent while the ratio this time is around 8 per cent. As a result, year-on-year comparison will reduce the allocation in many sectors.
According to the decision of the Finance Division, high inflation is the most touchy issue in this years budget. Not only that, this budget is giving more importance to controlling inflation than achieving higher gross domestic production (GDP) growth.
The budget session, the third session of the Jatiya Sangsad, started on Wednesday.
Finance Minister Abul Hassan Mahmood Ali is concerned about the global crisis, rise in inflation, depreciation of the dollar, slow revenue collection, decline in reserves and balance of payments.
A devaluation of the currency increases the cost of foreign borrowing, which adds to the challenge for the countrys economy. The reasons of introducing the Universal Pension System and its necessity will also be detailed in the budget speech. Prime Minister Sheikh Hasina has already consented to this budget speech of the Finance Minister. The first part of the budget speech will highlight the various developments of the government. Inflation and rising commodity prices will also feature in his speech. These have been blamed on the post-Covid Russia-Ukraine war. It is mentioned that reserves will increase and inflation will decrease by next December.
According to the draft budget document available to the Daily Observer. the total deficit is Tk 251,600 crore which is 4.6 per cent of GDP. Tk 127,200 crore of foreign loans will be taken to meet the shortfall. A loan of Tk 137,500 crore will be taken from the banks. Tk 23,400 crore will be taken from savings certificates. Apart from this, it is also assumed that assistance of Tk 120,000 crore will be available from abroad to meet the budget deficit.
In the budget of the upcoming fiscal year, the total income has been estimated at Tk 545,400 crore. Out of this the revenue is Tk 480,000 crore. In the current fiscal year 2023-2024 which was Tk 500,000 crore. Revenue growth has been estimated at 8 per cent. Another Tk 15,000 crore in revenue will come from non-NBR sources. And the target of income outside tax is Tk 45,000 crore. The growth of GDP has been estimated at 6.75 per cent in the upcoming budget. In the outgoing fiscal year which was 7.5 per cent. Later, however, it was reduced to 6.5 per cent in the revised budget.
The new budget plans to keep the inflation pressure at 6.5 per cent next year. Inflationary pressures are currently hovering around double digits. The size of the annual development programme for the upcoming fiscal year has been estimated at Tk 265,000 crore. In the outgoing fiscal year it was Tk 263,000 crore. In the revised budget, the size of ADP has been reduced by Tk 18,000 crore to Tk 245,000 crore.
Despite the landslide victory of Awami League in the twelfth national election, the government was formed, but there is international pressure on the government. Bangladesh may face a shock in terms of global trade if America or the European Union imposes various restrictions on the garment sector. Already high foreign debt, dollar crisis, negativity in balance of payments, negative growth in revenue collection, high inflation, chaos in the market system, crisis in power and energy sector, lack of momentum in investment and employment have stalled the countrys economy. As a result, the first budget of the new term is considered by the Finance Division officials to deal with the shock of the ongoing hostile period.
