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Current budget cut by Tk 473.67b amid financial crunch

To give some relief from borrowing pressure in deficit financing

FE REPORT | June 07, 2024 12:00:00

As fund shortage and slower development-works execution stood in the way, the government proposed to cut the national budget for the outgoing fiscal year by Tk 473.67 billion to Tk 7.14 trillion.

The reduction would "ultimately give a breath of relief to the government as its borrowing pressure from domestic and external sources will be reduced," economists say.

The pared-down revised budget deficit is estimated at 4.7 per cent of the GDP from 5.2 per cent in the original budget for the fiscal year 2023-24.

During July-March period of the current FY, the government had spent Tk 3.31 trillion from the budget, the Ministry of Finance (MoF) data showed.

The statistics were unveiled in the proposed national budget worth Tk 7.97 trillion for the next financial year2024-25 placed Thursday in parliament by Finance Minister Abul Hassan Mahmood Ali.

In the current fiscal budget, an income deficit of Tk 2.618 trillion was projected which is now proposed to be revised down to Tk 2.36 trillion or 4.7 per cent of the GDP.

The government in June last year (2023) proposed a budget of Tk 7.618 trillion in the national parliament with a deficit of Tk 2.618 trillion.

However, considering the overall progress of expenditure until April, the public expenditure is proposed to be reduced by Tk 473.67 billion, bringing it down to Tk 7.14 trillion in the revised budget, the Finance Minister, Mr Ali, said in his budget speech.

In this pruning, the allocation for annual development programme is proposed to be Tk 2.45 trillion by reducing Tk 180 billion from the original allocation of Tk 2.63 trillion.

In the revised Tk 2.36-trillion budget deficit, some Tk1.56 trillion is proposed to be financed from domestic sources and Tk 797.93 trillion from foreign aid.

Meanwhile, the operating budget has also been proposed trimmed to Tk 4.34 trillion from Tk 4.36 trillion in the original budget for the current FY2024 and the development expenditure to Tk 2.60 trillion from Tk 2.77 trillion in the original outlay.

The 'miscellaneous expenditure' has also been cut significantly to Tk 203.54 billion in the revised budget from Tk 479.56 billion in the original allocation.

On the other hand, the income for implementing the national budget has also been reduced as the National Board of Revenue (NBR) and other government systems have also failed to achieve the target over the months.

The income target from taxes has also lowered to Tk 4.78 trillion in the revised budget from Tk 5.0 trillion in the original mark.

Out of the revise target, the revenue from the NBR has been reduced by Tk 200 billion to Tk 4.10 trillion. In the original budget, the revenue target was proposed at Tk 4.30 trillion.

According to the MoF data, the NBR had generated Tk 2.49 trillion till March this FY2024.

Also lowered is the non-NBR tax target to Tk 190 billion in the revised budget from Tk 200 billion in the original one.

The government has trimmed down the non-tax revenue to Tk 490 billion in the revised budget of the outgoing FY2024 from Tk 500 billion in the original estimation.

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