A budget to fulfil promises

REF:  The first budget for Sheikh Hasina government’s second term will be presented on Thursday.The Tk 2.5 trillion budget will have a Tk 674.98 billion deficit.

Budget

Finance Minister AMA Muhith will present the budget, having a Tk 1.84 trillion revenue target, in Parliament.“This will be a budget to meet promises unfulfilled in the last term,” Muhith told

“We want to finish the work we could not in the last term.”The minister said full-fledged work on the Padma bridge would start right after the budget passes.

“Despite a lot of efforts we could not begin the work of the nation’s largest infrastructure project. This time we’ll finish it within three-four years,” he said.

“Padma bridge is my dream. We will fulfil this dream with our own funds, and also fulfil all the other promises made to the nation,” he said.

Tk 81 billion has been allocated in the Annual Development Plan (ADP) for the Padma bridge construction.The minister said funds would be relocated from the revenue budget to the bridge if necessary.

Muhith said there would also be a large allocation to alleviate the Dhaka-Chittagong highway to four lanes and steps would be taken to construct the deep-sea port, metro rail and large power plants.

“On the whole this budget is designed to face the challenge of increasing investment. Political stability has returned and hopefully will continue. We will put emphasis on gas, power and infrastructure,” he said.

Muhith will present his eighth budget in parliament on Thursday. Apart from the late finance minister Saifur Rahman, no one has presented this many budgets.

Muhith feels grateful to Awami League and his leader Sheikh Hasina for the opportunity, given his history as a minister for a military government and bureaucrat background.

“It has been an honour for me to have presented six consecutive budgets.”“If my health allows I will present five more,” he said.

Muhith presented two budgets as the finance minister for deposed military dictator HM Ershad.

Size of the budget

The probable size of the 2014-15 budget is Tk 2,502 billion. The size of the ADP will be Tk 803.15 billion. Non-development budget is about Tk 1.7 trillion.

The estimated revenue income is Tk 1.84 trillion, of which Tk 1,497.2 billion will come from the National Board of Revenue (NBR).

Subsidies going down

There will be a total of Tk 260.53 billion in subsidies in the proposed budget. In the last fiscal the budget size was about Tk 320 billion.

Another big portion of the non-development budget, the salaries of government employees, is estimated to be Tk 308.09 billion. Tk 308 billion has been kept for interest payment.

The size of the 2013-14 budget was Tk 2,224.91 billion. The targeted revenue collection was Tk 1,360.9 billion. A development budget of Tk 658.7 billion covering 1,200 projects was declared.

But the NBR cut down on revenue target due to political turmoil to Tk 1,250 billion and the ADP was cut down to 600 billion.

Budget deficit

The total deficit minus donor funds in the upcoming budget has been estimated as Tk 674.98 billion, which is 5.1 percent of the GDP.

Of this deficit, Tk 244.98 billion will be supplied from donor funds and the rest, Tk 430 billion, through internal borrowing. The internal borrowing includes bank loans and proceedings from the sale of savings certificates.

In the last budget the deficit was Tk 550.32 billion, which was 4.6 percent of the GDP.

GDP growth

The GDP growth target in the new budget is 7.3 percent. In the last budget this target was 7.2 percent. But later it was revised down to 6.5 percent.

World Bank, ADB, IMF and local economists had forecast that the growth rate would come down under six percent. But according to the statistics bureau’s current estimate, there will be a 6.12 percent growth in the economy in this fiscal.

Revenue target

The revenue target for 2014-15 budget has been estimated at Tk 1.84 trillion. Direct taxes from NBR will cover Tk 1,517 billion of this target, taxes from outside NBR Tk 52.1 billion and non-tax sources Tk 280 billion.

In the 2013-14 budget the revenue target was Tk 1,674.59 billion. NBR was supposed to collect Tk 1,360.9 billion of this. But due to the political turmoil, this was downsized by Tk 110 billion or 8.08 percent to Tk 1,250 billion.

Major sectors

Besides broadening the social safety net, rail communications and rural infrastructure and other infrastructure projects will be top priority in the new budget. The finance minister said there would be special allocations for these sectors.

The new budget will also give special priority to seven fast-track mega-projects. These are: Padma bridge, Sonadia deep-sea port, LNG terminal, large coal-based power plant, Rooppur nuclear power plant, Asian highway and metro rail project.

Besides, the highest allocations will be made in human resource, education, health, agriculture, power and fuel and communications.

District budgets

The finance minister will present the budgets for seven districts this year. The districts are: his own district Sylhet, Khulna, Chittagong, Tangail, Barisal, Rajshahi and Rangpur.

Along with other budget documents a booklet titled ‘District-wise budget allocation 2014-15 (Sylhet, Khulna, Chittagong, Tangail, Barisal, Rajshahi and Rangpur)’ will be supplied on the budget day.

Inflation

The new budget plans to keep the average inflation within 6 percent. In the last budget this target was 7 percent. At the end of April, the average inflation was 7.47 percent.

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