Debt servicing, subsidies, and electoral pledges will make the upcoming fiscal year’s budget large in both expenditure and revenue collection.
According to the finance ministry’s proposal, the upcoming fiscal year’s budget will 17.7 percent higher from this year at Tk 930,000 crore, which is 13.6 percent of GDP.
The budget proposal was presented to Prime Minister Tarique Rahman over the past two days.
The prime minister’s directive was that the budget must reflect the BNP’s electoral pledges, with increased allocations for social safety programmes for the poor, The Daily Star has learnt from finance ministry officials involved with the proceedings.
Allocations for interest payments may exceed Tk 145,000 crore. In the previous fiscal year, Tk 122,000 crore was allocated, but actual expenditure reached Tk 134,430 crore and may exceed Tk 140,000 crore.
For social safety net programmes, the allocation may exceed Tk 140,000 crore in the next fiscal year. This would include Tk 17,000 crore for Family Card and Farmers’ Card, both part of the BNP’s electoral commitments. This fiscal year, Tk 117,000 crore was allocated.
For subsidies and incentives, Tk 115,000 crore has been allocated like this fiscal year, but it may increase significantly due to the Middle East war.
Preliminary estimates show gas subsidies at Tk 20,000 crore, compared with the original Tk 6,000 crore. However, Tk 6,500 crore is being allocated for the next fiscal year, assuming the war may end and LNG prices could fall in the international market.
In the power sector, Tk 36,000 crore was allocated this year, which may rise to Tk 41,000 crore in the revised budget. For the next fiscal year, Tk 36,000 crore has been earmarked. With electricity price hikes and the launch of the Rooppur nuclear power plant, subsidies are expected to decline.
No allocation is being made for fuel oil, as prices will be adjusted according to international market formulas. If subsidies are still needed, the Bangladesh Petroleum Corporation will adjust from its previous profits.
For fertiliser, Tk 17,000 crore was allocated this year, which may rise to Tk 19,000 crore. For the next fiscal year, Tk 27,000 crore is being allocated.
Additionally, Tk 9,600 crore is being allocated for food subsidies and Tk 7,000 crore for remittance incentives.
A Tk 100 crore fund will be created for the creative economy in the next fiscal year, fulfilling a BNP electoral pledge.
The ministry has already prepared a concept paper, and detailed guidelines will follow after the budget.
The target is to raise the creative economy’s share to 1.5 percent of GDP. The World Bank has shown interest in investing in this sector and agreed to provide technical support, according to an official.
As much as Tk 300,000 crore will be allocated for the annual development programme, up 50 percent from this fiscal year’s revised budget.
The secondary and higher education division will get the highest allocation of Tk 50,302 crore, followed by health services division (Tk 43,189 crore), local government division (Tk 43,130 crore), defence ministry (Tk 42,462 crore), and primary and mass education ministry (Tk 42,145 crore).
The road transport and highways division will get Tk 39,079 crore, home ministry Tk 31,010 crore, agriculture ministry Tk 28,776 crore, power division Tk 19,244 crore, and science and technology ministry Tk 18,077 crore.
To implement the large budget, revenue collection will be set at Tk 695,000 crore, which is 10.2 percent of GDP.
Of this, tax revenue will be Tk 629,000 crore, which is 9.2 percent of GDP.
