‘Cheerful’ Finance Minister Muhith set to present a ‘bold’ budget for Bangladesh

Finance Minister Abul Maal Abdul Muhith is going to unveil a Tk 3 trillion jumbo budget for the 2015-16 fiscal on Thursday, with a target to fund two-thirds of the spending from the revenue sector.

The 83-year-old minister believes he is being ‘brave’ for tailoring a budget of this size to improve standards of living of the people.

He is emboldened by the drop in international oil prices, political stability after months of turmoil, and controlled inflation.

The installation of tax offices at Upazilas, warning for taxmen to ditch ‘old style’ and bringing 500,000 new taxpayers under the net after a survey have helped him to get ambitious.

Muhith will set a record by placing his seventh consecutive national budget.

He had made budgets as the finance minister of the Sheikh Hasina government six times.

Thursday’s will be his ninth in total.

File Photo

“I have grown in confidence by making big budgets. It has made me optimistic. I am going to place the Tk 3 trillion budget oozing with that optimism,” Muhith told bdnews24.com on Wednesday. 

He said a target to collect Tk 2 trillion from revenue will be set to implement the ‘big’ budget.

“I’m going to place the budget in a truly comfortable condition... never before have I placed a budget in such a cheerful mood.

“Stability is back in politics. Shutdowns and blockades appear to be over for good. Our entrepreneurs have regained confidence,” he said.

Industrial entrepreneurs are also viewing the drop in oil prices in the international market as the best opportunity for investment.

But they are frustrated by the failure to get gas and power connections.

The price of oil has halved in the international market in past one year. Food prices are low and global inflation is also under control.

Moreover, Bangladesh’s foreign exchange reserves have touched a record $24 billion while expatriates are remitting more and more. Exports are also on the rise.

File Photo

“The overall condition gave me courage to plan a big budget,” Muhith said.

A look at the past few years’ budgets shows revenue collection increased by 11 percent in five years of the Awami League government.

In one fiscal year, the National Board of Revenue (NBR) collected 23 percent more revenue than the previous year.

The government upped spendings in proportion to the rise in revenue earning.

Muhith, however, never allowed the deficit between earnings and expenses to be over five percent in any fiscal year.

He did not even blink when Prime Minister Sheikh Hasina wanted to raise the allocation for the Annual Development Programme (ADP) by Tk 45 billion during the meeting of the National Economic Council on May 14.

That is why the NBR will have to collect Tk 1.76 trillion in revenues instead of the preliminary target of Tk 1.65 trillion.

The finance minister, however, plans to burden people with no fresh taxes.

But AB Mirza Azizul Islam, who advised a former caretaker government on finance, has sounded caution.
 
“I have seen budget goals being missed for the past four years. Revenue collection, overall expenditure, GDP growth, inflation – the targets remained unattained in all cases,” he said.
 
Mirza Aziz, who placed two budget proposals during 2007-8 caretaker government, suggested making the budget “realistic”.
 
Four decades ago, the first budget of Bangladesh designed by the then finance minister Tajuddin Ahmad was of Tk 7.86 billion.
 
The regime of military ruler Ziaur Rahman saw three budgets, with the last one worth Tk 25 billion.
 
Late finance minister Saifur Rahman, who prepared 12 budgets, started with a Tk 41 billion one and ended with Tk 700 billion.
 
During Awami League’s 1996-2001 term, late finance minister Shah AMS Kibria was not keen to make ‘big’ budgets. 
 
Mirza Aziz’s two budgets were within Tk 1 trillion.
 
Muhith, who prepared a Tk 1.13 trillion budget for 2009-10 fiscal year, said the budget for 2015-16 fiscal would be one to ‘make dreams of changing times a reality’.

“The dream is coming true... we will be a middle-income country before 2021,” he said.
 
GDP target 7.1 percent
 
The government targetted a 7.3 percent GDP growth in the Tk 2.5 billion budget for 2014-15 fiscal year.
 
According to Bangladesh Bureau of Statistics (BBS), the GDP will grow by 6.51 percent.
 
In the 2015-16 fiscal year, the target will be 7.1 percent.
 
The finance minister is also aiming to bring inflation below six percent.
 
The overall deficit would be around Tk 860 billion, finance ministry officials said.