Dhaka, Bangladesh (BBN)– Bangladesh government is set to announce a budget of BDT 3.40 trillion aiming to achieve 7.2 per cent economic growth by the end of the upcoming fiscal year (FY).
Finance Minister AMA Muhith is scheduled to propose the national budget for the FY 17 at the National Parliament in the capital Dhaka on Thursday afternoon.
The finance minister will be placing his consecutive eighth budget at the Parliament from 03:00 pm with power-point presentation on the crucial yearly spending plan for the nation.
Of the total budget outlay, BDT 1.10 trillion would be set aside for development expenditure and the remainder for non-development spending.
The total revenue-generation target has been set at BDT 2.42 trillion. The National Board of Revenue would have to generate 84 per cent of the targeted amount.
Non-tax revenue, which usually comprises dividends and profits of government entities, has been set at BDT 323 billion. Of the revenue target, 36.47 per cent would come from value added tax (VAT) and 35.93 per cent from income tax.
To meet the shortfall in the deficit budget, the government would borrow BDT 970 billion, equivalent to 5.0 per cent of the GDP (gross domestic product).
In case of deficit financing, the bank borrowing target would be set at BDT 389 billion and another BDT 200 billion is expected to come from national savings schemes.
The draft budget is likely to focus on the implementation of 10 first track mega projects to spur growth and development catering for the huge population and business sector.
Two deep sea ports, Rooppur Nuclear Power project, Metro rail, Matarbari coal-fired power plant and Padma Bridge Rail Link are among the first track projects, according to officials.
The document for the mega projects would be titled ‘Big projects in transforming infrastructure: new dimension in accelerating growth.’
The budget speech would focus on job creation, enhanced investment, and women empowerment, they
The budget document is likely to slash the allocation for subsidies, as petroleum prices in the global markets are plummeting.
The original budget for FY16 earmarked BDT 250 billion for subsides, but the revised budget slashed it to BDT 180 billion.
In FY 17, the government may set earmark BDT 400 billion for interest payments, up from BDT 350 billion in FY16.
Despite some risk factors, the government is set to keep the inflation rate at 5.8 per cent in the next fiscal beginning from July 1, 2016.
The inflation target has been estimated considering the existing prices of essential commodities including petroleum products in the global market, a senior official familiar with the budget preparations told BBN in Dhaka earlier.