Economist Zaid Bakht says budget implementation will be a challenge

Economist Zaid Bakht thinks the implementation of the proposed ‘expansionary’ budget by meeting the revenue collection target will be a challenge in itself.

In an instant reaction to the budget proposal, he said on Thursday, “I would say it’s an expansionary budget.”

Finance Minister Abul Maal Abdul Muhith placed the budget proposals for FY 2015-16 in Parliament with an outlay of Tk 2.95 trillion.

The revised budget for the current FY is Tk 2.4 trillion.

The GDP has been estimated at Tk 15.14 trillion for the current FY while a Tk 17.17 trillion GDP has been projected for the new financial year.

Bakht, a former research director at the Bangladesh Institute of Development Studies, said, “Budget has increased not only in size; it increased relatively and in terms of percentage of GDP too.”

For the current FY, the budget was around 16 percent of GDP.

“Now it will be 17.2 percent. So it’s an expansionary budget.”

He thinks the budget has been formulated to stimulate the economy through enhancement of investment from both public and private sectors.

The finance minister also pledged measures for boosting investment.

Over the past ten years, the total investment in terms of GDP has increased to 28.9 percent from 25.8 percent.

Muhith pledged enhancement of investment to 31.8 percent of the GDP by 2018.

Bakht expressed his doubts over the reaching the revenue collection target.

“The challenge is finance. The target that the National Board of Revenue has fixed for that (facing the challenge) is 30 percent more than the current FY’s revised budget,” he said.​

“The finance minister, in his speech, called it (the budget) ambitious. But in reality, it’s more than that. Because there is little scope of reaching the target shown in the revised budget.”

The new budget set the revenue collection target at Tk 2.84 trillion. In the current FY’s budget, the figure was Tk 1.83 trillion and was later downsized to Tk 1.63 trillion.

Private investment needs to grow

Financial sector researcher Ahsan H Mansur said the government would have to make all-out efforts to attract investments from the private sector to implement the budget.

In his immediate reaction, he told bdnews24.com: “The revenue collection target fixed in the budget is undoubtedly ambitious.”

“There is no alternative to expediting investment for collection of the targeted revenue and attainment of 7 percent GDP growth.”

Mansur, Executive Director at Policy Research Institute, said the implementation of the budget was very important as it was the first one in the seventh Five-Year Plan.