Muhith expects to keep budget deficit below original projection
Wednesday, 17 March 2010
FE Report
Budget deficit is expected to be less than the projected one at the end of the current financial year (2009-10) due to lower development and revenue expenditure.
Finance minister Abul Maal Abdul Muhith, while placing the budget implementation progress report in the Jatiya Sangsad Tuesday, informed the Jatiya Sangsad that overall budget expenditure would fall short of the original projection by about Tk 33 billion.
He said the revenue expenditure at the end of the current fiscal is expected to be Tk 12.95 billion less than the original projection. Similarly, the development expenditure would be lower by Tk 20 billion that the original estimate.
In his budget speech in June last year, Mr Muhith estimated the budget deficit at Tk 343.58 billion.
"It is expected that Tk 137.14 billion will come from foreign sources and Tk 173.25 billion will come from domestic sources to meet the budget deficit," the finance minister said.
The government had surplus revenue of Tk 9.46 billion in the July-December period of the current fiscal mainly because of lower than usual revenue expenditure. The government earned Tk 355.53 billion revenue while
Continued to page 7 col. 6FE Report
Budget deficit is expected to be less than the projected one at the end of the current financial year (2009-10) due to lower development and revenue expenditure.
Finance minister Abul Maal Abdul Muhith, while placing the budget implementation progress report in the Jatiya Sangsad Tuesday, informed the Jatiya Sangsad that overall budget expenditure would fall short of the original projection by about Tk 33 billion.
He said the revenue expenditure at the end of the current fiscal is expected to be Tk 12.95 billion less than the original projection. Similarly, the development expenditure would be lower by Tk 20 billion that the original estimate.
In his budget speech in June last year, Mr Muhith estimated the budget deficit at Tk 343.58 billion.
"It is expected that Tk 137.14 billion will come from foreign sources and Tk 173.25 billion will come from domestic sources to meet the budget deficit," the finance minister said.
The government had surplus revenue of Tk 9.46 billion in the July-December period of the current fiscal mainly because of lower than usual revenue expenditure. The government earned Tk 355.53 billion revenue while spent Tk 346.07 billion during the first half of the current fiscal, he said.
Mr Muhith placed Tk 1.138 trillion budget for the 2009-10 fiscal in June last year.
Out of the total expenditure, Tk 88.07 billion (8807 crore) spent under annual development programme and Tk 258 billion (25800 crore) spent as revenue budget.
The total amount of revenue fetched by the government during the period under review was Tk 355.53 billion, representing 44.7 per cent of the total revenue target set for the current fiscal. The tax revenue earned during the July-December period was 43.3 per cent of the yearly target.
The minister in the budget progress report presentation reiterated that the country would have a growth rate of six per cent in the current fiscal.
Muhith informed the house that the power division had failed to complete the formalities including floatation of tenders to initiate different projects in the current fiscal.
"It is expected that the division would not be able to spend Tk 10.59 billion in the fiscal." The division has an allocation of Tk 31.33 billion in the budget.
Mr Muhith said not much progress could be achieved in the public-private partnership (PPP) projects.
"No good initiative has ever been successful at the first instance and I also believe that PPP will be able to attract investment quickly to attain desired growth rate," he said adding, "The government has taken initiative to make the PPP successful."
About the ADP implementation, the minister said the 10 biggest fund recipients implemented 31.1 per cent of the programme whereas the rest 39 ministries implemented only 21.8 per cent of their allocation during the first six months of the current fiscal.
In the revised budget, it is expected that education, agriculture, defence, water resources, home, energy and mineral resources and environment ministries would get more allocation while finance division, power division, bridge division, planning division, shipping ministry and civil aviation and tourism ministry would get less allocation, the minister said.
The minister said the earning from imports has been declining gradually while that from direct taxes is picking up.
Inflation is showing an upward trend due to various factors including hike in commodity prices in the international market and robust inflow of remittance, he said.
"Inflation reached at 8.5 per cent in December and the government has taken a number of measures to rein in prices."
Export sector earned $7.274 billion in July-December period, which was 6.2 per cent less than that of the previous year, he said
"Orders for readymade garment sector have started picking up and it is expected that the situation would improve in the following months."
The government has earmarked Tk 18 billion on account of cash incentive and subsidy and in the first six months Tk 9 billion was disbursed, he said.
Import payments also fell by 5.5 per cent over that of the same period of the last fiscal due to fall in the prices of oil and other commodities.
"But it is a encouraging sign that LC opening for capital machinery increased by 37.4 per cent during the period under review."
The minister said a total of 0.224 million workers went abroad expatriates sent $5.536 billion between July and December 2009.
The country had a foreign exchange reserve of over $10 billion, which was enough to meet import payments for six months, the minister said. In December 30, 2008 the reserve was only $5.788 billion.
Bangladesh Bank has adopted pro growth monetary policy and money supply increased by 20.7 per cent in July-December period of the current fiscal which was 19.2 per cent in the previous fiscal of the same time.
Domestic lending increased by 13.7 per cent, a drop from the previous year of 16 per cent, he said.
The minister, however, said credit flow to the private sector increased to 19.2 per cent, which was 14.6 per cent in the first six months of last fiscal.
The government has attached maximum importance to agriculture sector and in the first six months Tk 55.98 billion farm loan was disbursed.
The agriculture loan target has been fixed at Tk 115.12 billion for the current fiscal, which is 22.7 per cent more than that of the target of the last fiscal.
"The regulations have been relaxed to make the agriculture loans available for the genuine farmers at their doorsteps," Mr Muhith said.
The government has also put emphasis on industrial sector and lending to the sector achieved 41.1 per cent growth in the period.
The minister said the government in April last year announced the first stimulus package of Tk 34.24 billion to face the global recession.
"In the second package in November declared incentive for garments, shipbuilding and crust leather sectors," he said.
Global recession did not have any impact on capital market as it had low foreign portfolio investment integration, the minister said.
"The market capitalisation of the stock market sharply went up to 30.4 per cent of the GDP from 19.3 per cent a year back," he said adding, "General index and turnover also recorded a significant increase."
The government is considering setting up of a dedicated bench in the High Court to resolve revenue related cases within shortest possible time.
"It also has plan to introduce alternative dispute resolution system to settle other trade and business related cases," Mr Muhith said.
Budget deficit is expected to be less than the projected one at the end of the current financial year (2009-10) due to lower development and revenue expenditure.
Finance minister Abul Maal Abdul Muhith, while placing the budget implementation progress report in the Jatiya Sangsad Tuesday, informed the Jatiya Sangsad that overall budget expenditure would fall short of the original projection by about Tk 33 billion.
He said the revenue expenditure at the end of the current fiscal is expected to be Tk 12.95 billion less than the original projection. Similarly, the development expenditure would be lower by Tk 20 billion that the original estimate.
In his budget speech in June last year, Mr Muhith estimated the budget deficit at Tk 343.58 billion.
"It is expected that Tk 137.14 billion will come from foreign sources and Tk 173.25 billion will come from domestic sources to meet the budget deficit," the finance minister said.
The government had surplus revenue of Tk 9.46 billion in the July-December period of the current fiscal mainly because of lower than usual revenue expenditure. The government earned Tk 355.53 billion revenue while
Continued to page 7 col. 6FE Report
Budget deficit is expected to be less than the projected one at the end of the current financial year (2009-10) due to lower development and revenue expenditure.
Finance minister Abul Maal Abdul Muhith, while placing the budget implementation progress report in the Jatiya Sangsad Tuesday, informed the Jatiya Sangsad that overall budget expenditure would fall short of the original projection by about Tk 33 billion.
He said the revenue expenditure at the end of the current fiscal is expected to be Tk 12.95 billion less than the original projection. Similarly, the development expenditure would be lower by Tk 20 billion that the original estimate.
In his budget speech in June last year, Mr Muhith estimated the budget deficit at Tk 343.58 billion.
"It is expected that Tk 137.14 billion will come from foreign sources and Tk 173.25 billion will come from domestic sources to meet the budget deficit," the finance minister said.
The government had surplus revenue of Tk 9.46 billion in the July-December period of the current fiscal mainly because of lower than usual revenue expenditure. The government earned Tk 355.53 billion revenue while spent Tk 346.07 billion during the first half of the current fiscal, he said.
Mr Muhith placed Tk 1.138 trillion budget for the 2009-10 fiscal in June last year.
Out of the total expenditure, Tk 88.07 billion (8807 crore) spent under annual development programme and Tk 258 billion (25800 crore) spent as revenue budget.
The total amount of revenue fetched by the government during the period under review was Tk 355.53 billion, representing 44.7 per cent of the total revenue target set for the current fiscal. The tax revenue earned during the July-December period was 43.3 per cent of the yearly target.
The minister in the budget progress report presentation reiterated that the country would have a growth rate of six per cent in the current fiscal.
Muhith informed the house that the power division had failed to complete the formalities including floatation of tenders to initiate different projects in the current fiscal.
"It is expected that the division would not be able to spend Tk 10.59 billion in the fiscal." The division has an allocation of Tk 31.33 billion in the budget.
Mr Muhith said not much progress could be achieved in the public-private partnership (PPP) projects.
"No good initiative has ever been successful at the first instance and I also believe that PPP will be able to attract investment quickly to attain desired growth rate," he said adding, "The government has taken initiative to make the PPP successful."
About the ADP implementation, the minister said the 10 biggest fund recipients implemented 31.1 per cent of the programme whereas the rest 39 ministries implemented only 21.8 per cent of their allocation during the first six months of the current fiscal.
In the revised budget, it is expected that education, agriculture, defence, water resources, home, energy and mineral resources and environment ministries would get more allocation while finance division, power division, bridge division, planning division, shipping ministry and civil aviation and tourism ministry would get less allocation, the minister said.
The minister said the earning from imports has been declining gradually while that from direct taxes is picking up.
Inflation is showing an upward trend due to various factors including hike in commodity prices in the international market and robust inflow of remittance, he said.
"Inflation reached at 8.5 per cent in December and the government has taken a number of measures to rein in prices."
Export sector earned $7.274 billion in July-December period, which was 6.2 per cent less than that of the previous year, he said
"Orders for readymade garment sector have started picking up and it is expected that the situation would improve in the following months."
The government has earmarked Tk 18 billion on account of cash incentive and subsidy and in the first six months Tk 9 billion was disbursed, he said.
Import payments also fell by 5.5 per cent over that of the same period of the last fiscal due to fall in the prices of oil and other commodities.
"But it is a encouraging sign that LC opening for capital machinery increased by 37.4 per cent during the period under review."
The minister said a total of 0.224 million workers went abroad expatriates sent $5.536 billion between July and December 2009.
The country had a foreign exchange reserve of over $10 billion, which was enough to meet import payments for six months, the minister said. In December 30, 2008 the reserve was only $5.788 billion.
Bangladesh Bank has adopted pro growth monetary policy and money supply increased by 20.7 per cent in July-December period of the current fiscal which was 19.2 per cent in the previous fiscal of the same time.
Domestic lending increased by 13.7 per cent, a drop from the previous year of 16 per cent, he said.
The minister, however, said credit flow to the private sector increased to 19.2 per cent, which was 14.6 per cent in the first six months of last fiscal.
The government has attached maximum importance to agriculture sector and in the first six months Tk 55.98 billion farm loan was disbursed.
The agriculture loan target has been fixed at Tk 115.12 billion for the current fiscal, which is 22.7 per cent more than that of the target of the last fiscal.
"The regulations have been relaxed to make the agriculture loans available for the genuine farmers at their doorsteps," Mr Muhith said.
The government has also put emphasis on industrial sector and lending to the sector achieved 41.1 per cent growth in the period.
The minister said the government in April last year announced the first stimulus package of Tk 34.24 billion to face the global recession.
"In the second package in November declared incentive for garments, shipbuilding and crust leather sectors," he said.
Global recession did not have any impact on capital market as it had low foreign portfolio investment integration, the minister said.
"The market capitalisation of the stock market sharply went up to 30.4 per cent of the GDP from 19.3 per cent a year back," he said adding, "General index and turnover also recorded a significant increase."
The government is considering setting up of a dedicated bench in the High Court to resolve revenue related cases within shortest possible time.
"It also has plan to introduce alternative dispute resolution system to settle other trade and business related cases," Mr Muhith said.