The Finance minister AMA Muhit has placed the budget for the fiscal year 2015-16 in our national parliament recently. The size of the budget for 2015-16 is Tk.2,951.0 billions which is 17.0 per cent of our GDP. This year's budget is lofty in term of its size and goals but to my mind it is not a utopian budget.
Implementation of the budget will be challenging since government has huge targets to meet. Major portion of targeted revenue will come up from NBR (national board of revenue). The government has set a big target for NBR amounting to Tk.1,76,3.7 billions which is 30 percent higher than that of the previous year. Many experts opined that targeted revenue generation from NBR can not be achieved with its present set up and as such it has to be restructured for enhanced capacity.
As a developing country, it is usual that we shall have a deficit budget. This year the gap between expenditure and revenue earning is Tk.866.57 billions which will be met from both domestic and foreign sources. To meet the budgetary deficit, the government has to depend on the banking sector. In 2015-16, the government has projected to borrow Tk.380.00 billions from the banking sector, which will affect the credit flow to the private sector.
The government has projected a GDP growth rate of 7.0 per cent for 2015-16 fiscal which may not be possible to achieve as our experience in the previous years indicate. In addition, private investments are also not forthcoming.
The government aspires to be a middle income county by2021 and to that end it has to maintain a GDP growth rate of over 7.0 per cent which is not going to be easy. Investment from both domestic and external sources will have to increase.
The Finance Minister hopes that inflation will be contained at 6.2 per cent which looks difficult as the government is going to implement new pay scale for government employees which will involve an additional expense of Tk.160.0 billions more per year.
Furthermore, political situation may hamper execution of the budget. However, there is nothing wrong with the budget although many of us are sceptic about its proper implementation.
Last but not the least, proper execution of the budget will depend on the capacity of the government to ensure good governance and a peaceful political situation.
Md Zonaed Emran
The Farmers Bank Ltd.
zonaed.emran@gmail.com
Budget lofty but not utopian
FE Team | Published: June 12, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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