Dhaka, Bangladesh (BBN)- The Parliament approved a $22bn (BDT 1.63 trillion) budget for FY 2011-12, 26 percent higher than the outgoing revised budget, International Chamber of Commerce-Bangladesh (ICCB) said on Wednesday.
The budget includes BDT 1163.13 billion for non-development expenditure and BDT 472.76 billion for development expenditure.
The deficit of BDT 452.04 billion (5 percent of GDP) is almost the same size of BDT 460 billion ADP (Annual Development Plan).
Of the outlay, 56.2 percent will come from tax revenue, 13.8 percent from non-tax revenue and 11 percent from foreign loan and grants. A big chunk of the budget (16.6 percent) is to come from domestic sources, mostly from bank loans, according to the Editorial of the current ICCB News bulletin of International Chamber of Commerce-Bangladesh (ICCB) released on Wednesday.
The National Board of Revenue (NBR) should be congratulated for increasing the revenue collection by almost 27 percent or BDT 166.5 billion more than the last fiscal year (FY10).
“Therefore, the government could easily meet much of the deficit by consolidating its efforts in increasing revenue collections and by settling huge long outstanding tax and custom cases instead of borrowing from commercial banks and thus help banks to provide much needed loan to the private sectors for investment,” it added.
The budget FY12 sets a spurring 7.0 percent growth target with a check to runaway inflation. Even though experts have warned that the ambitious growth target will be difficult to attain, the businesses feel that against a 6.7 percent growth in FY11, the growth target is achievable with political stability and all out efforts by both public and private sectors.
“An increase of 26 percent is definitely ambitious and big. However, the business leaders opined that to achieve a higher growth a bigger target and of course selection of right kind of projects are needed with ensuring timely efficacious implementation and close monitoring,” it noted.
Lots of questions arise about the quality of the projects selected for each ADP and the capacity of the executing agencies. Political priorities outplays development requirement in project selections. Besides, in every third quarter of a financial year, the ADP is invariably downsized due to poor project selection and rate of execution.
“There is always a rush during the last quarter for completion of many projects, taking a toll on their quality,” the ICC Bangladesh added.
BBN/SSR/AD-13July11-9:05 pm (BST)
