The government has finalised the size of the next fiscal’s budget at Tk 468,200 crore with a special focus on development outcomes targeting upcoming national election.
The size of the upcoming budget was set at a recent meeting of the Resource Committee with Finance Minister AMA Muhith with the chair.
The size of the next budget will be Tk 68,000 crore higher than current fiscal’s outlay of Tk 400,266 crore, aimed at achieving 7.8 percent GDP growth. The 2018-19FY’s budget will be 18.4 percent of the GDP.
Revenue collection target has been set at Tk 340,775 crore or 13.4 percent of the GDP, up from Tk 287,991 crore revenue target set for the current fiscal year.
Economic analysts see the revenue target as ‘conservative’, saying that the government has made a cautious move in setting the revenue target as it does not want to put an extra burden on taxpayers in the election year.
The size of Annual Development Programme (ADP) has been set at Tk 173,000 crore including Tk 113,000 crore local resources and Tk 60,000 crore foreign resources.
This figure, excluding public corporations’ development plan, will be Tk 17,000 crore higher than current fiscal’s original ADP of Tk 164,000 crore, and Tk 24,000 crore higher than the revised ADP.
Planning Commission sources said public corporations’ self-financed ADP of nearly Tk 8,000 crore might be added to original ADP, which will increase the ADP size to Tk 181,000 crore.
Defence ministry is going to fetch the highest priority in ADP allocation with LGRD and cooperative ministry in the second position and road transport and highways division in the third, the sources added.
Other priority agencies are secondary and higher education division, power division, primary and mass education ministry, public security division, health services division, railways ministry and agriculture ministry.
In terms of ADP allocation, priorities are being set in line with the 7th five-year plan and sustainable development goals, according to planning commission officials.
Besides, higher GDP growth, job creation, human resource development, agriculture, transport, physical and rural infrastructure development, health sector, women development and ICT development are getting special focus in new ADP, they added.
At the same time, completing the ongoing projects instead of picking up new ones is being emphasised in new ADP to ensure proper utilisation of ADP funds.
Economic analysts expressed doubt over achieving the GDP target at 7.8 percent.They said concentrated efforts from both the public and the private sector play a key role in GDP growth, but the private sector might remain cautious in making new investments because of political uncertainty ahead of the election.
“The private sector usually adopts go-slow policy in the election year when it comes to new investment and production. They are not particularly interested in new investment in fear of political uncertainty,” said Mustafa K Mujeri, former director general of BIDS.
Analysts said it is quite natural that the poll-centric thoughts of the government are reflected in an election-year budget, but the main concern would be the implementation of the budget as polls draw a major focus prior to and after the election.