Finance Minister AMA Muhith now looks to keep the deficit in the next budget at 5.0 per cent of the gross domestic product (GDP) by putting its outlay at Tk 2.95 trillion (295,000 crore).
The finance minister instructed the Finance Division this week to keep the deficit within 5.0 per cent by showing the budget size at around Tk 2.95 trillion, people involved with preparation of the budget for the fiscal year (FY) 2015-16 told the FE on Thursday.
The division earlier had done some arithmetic on the size of the budget. Some time the size exceeded Tk 3.0 trillion and then again it fell below that mark. The division did it as persuaded by different quarters.
Mr Muhith will place his ninth budget as finance minister on June 04 (Thursday) before the Jatiya Sangsad.
The Finance Division is now cutting mainly block allocations to keep the deficit at a tolerable level.
The deficit in the next budget will be met mostly from domestic sources. Of the 5.0 per cent deficit, 3.2 per cent is being targeted to be met with resources from the domestic sources. Of the 3.2 per cent, the banking sector will meet 1.7 per cent and the non-banking sector 1.5 per cent. The sources in the non-banking sector include national savings certificates, provident funds and different other types of funds kept in the form of security money.
The remaining 1.8 per cent of the 5.0 per cent deficit is being targeted to be met from external sources.
However, economists say it would be difficult for the government to meet the target of borrowing from external sources in the next fiscal that will begin on July 01.
Dr Ahsan H Mansur, executive director of the Policy Research Institute (PRI), said borrowing from external sources will be a difficult task for the government, although there is a large amount of committed foreign aid in the pipeline.
Dr Mansur also noted that Bangladesh has the lack of efficiency in implementing projects and this is the reason for failure to utilise foreign aids up to the expected level.
Dr. Zaid Bakht, a research director at the Bangladesh Institute of Development Studies (BIDS), said Bangladesh could never borrow more than 18 per cent of the committed external funding. He observed that Bangladesh needed to enhance the rate of aid utilisation to at least 22 per cent to meet the targeted external funding in the next budget.
The foreign aid committed so far stood at more than US$ 20 billion.
The government plans to spend Tk 970 billion (97,000 crore) under the next ADP (Annual Development Programme).
If the government makes any fresh allocation in any sector on an urgent basis before presentation of the budget, the deficit may go up slightly.
jasimharoon@yahoo.com
Muhith sight set on 5.0pc budget deficit
Jasim Uddin Haroon | Published: May 29, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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