Leading economists have come up with mixed reaction about the probable Tk. 2.5 trillion size of the next budget which will be placed before the national parliament in June next.
Some economists said the size of the next national budget for the fiscal year (FY) 2014-2015 should be 'conservative' in view of the political uncertainty while some others argued that the budget might be expansionary as the economic activities were gaining momentum.
They, however, were unanimous that the budget deficit should not be under any circumstances over 5.0 per cent of the gross domestic product (GDP).
Earlier at a programme in Sylhet, Finance Minister AMA Muhith said the size of the national budget for the upcoming fiscal year might be around Tk 2.5 trillion.
The budget size for the FY 2013-14 was Tk 2.2 trillion. The revenue mobilisation target was set at Tk 1.6 trillion with the budget deficit fixed at Tk 55 billion or 4.6 per cent of the GDP.
Sources at the Finance Division said they were working on the next budget taking the size of Tk 2.5 trillion into consideration.
Dr Zaid Bakht, director (research) at the Bangladesh Institute of Development Studies (BIDS), said the next budget should be conservative in view of some political uncertainties and the slow recovery of economy.
"Our economic activities are yet to gear up after bleeding substantially at the fag end of the last calendar year," Mr. Bakht said.
He said nobody knew how long the existing stability on the country's political front would remain.
"If the existing peaceful situation prevails throughout the whole next fiscal year (2015), then the size is okay," Mr. Bakht added.
However, some argued that the next budget should be expansionary as the country's economic activities were gearing up and the there was a need for public investments.
Mr Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI) said the budget should be expansionary to some extent.
He said the reforms in tax administration must be implemented to achieve the government's revenue collection target.
"If the reforms are not done, then the revenue collection target will fail like this year (2013-14)," Mr. Mansur hinted.
The National Board of Revenue (NBR) Thursday said the revenue collection target was cut short by Tk 110 billion (11,000 crore) in the current fiscal (2014).
The revision of the target came following slow revenue collection due to prolonged political unrest and sluggish economic activities in the past few months of the current fiscal, the NBR chief said Thursday.
However, Mr. Mansur of the PRI said the expansionary budget should be aimed at serving productive purposes.
"If we can utilise budget money for productive purposes, then I'm in favour of expansionary budget," Mr. Mansur added.
Dr. Mustafa K Mujeri, director general at the BIDS, said the size what the finance minister had hinted at was not big in terms of its actual requirement.
"We need increased public investment in different infrastructure projects including power. So, this Tk 2.5 trillion size is not big," Mr. Mujeri said.
The main question was how to fund it and how effectively implement it, he added.
He noted that the foreign aid disbursement was becoming slow. So, the government must depend on the domestic resource mobilisation to meet its financing.
"The obstruction to mobilising domestic resource must be overcome, if we want to implement such a type of budget," said Mr. Mujeri, also a former chief economist of the Bangladesh Bank.
He said capacity for implementing a big budget should also be a key part of the budget. Otherwise, the budget would be only a 'paper-based' exercise, he added.
He said projects under the Annual Development Programme (ADP) should be chosen on a priority basis.
"If we can choose right projects and ensure its implementation in time, then it will ensure development. So, this important part of the budget should be taken into consideration," Mr. Mujeri said.
