Financing the Tk 2.95 trillion budget will be a challenge: CPD

The size of the Tk 2.95 trillion is not a problem but meeting the revenue collection targets will not be easy, says the Centre for Policy Dialogue (CPD).

In its budget analysis on Friday, a day after it was placed at Parliament, the CPD said it was ‘concerned’ about the target for the revenue collection.
 
“Government expenditures account for 17 percent of Bangladesh’s GDP. And a lot of countries like ours spend over 22 percent of its GDP, so Bangladesh also needs to increase it, “said CPD fellow Debapriya Bhattacharya.
 
“We are not concerned with the size of expenditure, but about how the funds will be sourced,” he told the media during the CPD’s budget analysis at Dhaka’s BRAC Centre Inn.  
 
In his Tk 2.95 trillion budget proposal, Finance Minister AMA Muhith projected a revenue collection of Tk 2.14 trillion, leaving a deficit of Tk 866.57 billion.
 
The FY 2015-16 budget aims to bridge the gap through domestic borrowings (Tk 565.23 billion) and from external sources (Tk 301.34 billion).
 
“Revenue has failed to make up for the expenditure. As a result, the expansionary budget will heavily depend on borrowing from internal sources,” said Bhattacharya.
 
CPD also feels the target for revenue collection will not be achieved.
 
In his budget speech, Muhith said that the around $4 billion worth of foreign assistance will be needed to bridge the deficit.
 
But Bhattacharya differed saying that at least $5 billion will be needed.
 
The 2015-16 budget proposal prioritised infrastructure, power and rural development.
 
According to Bhattacharya, Bangladesh needs increased allocations for infrastructure but more allocations are needed for health and education.
 
He came down hard on ‘development projects not being completed on time’.
  
The CPD fellow said that priority projects like the Padma Bridge and Rampal Power Plant are being implemented timely, but the others are lagging behind.
 
Bhattacharya lauded the budgetary measures on revenue collection. “We agree with the proposal to cut corporate tax as well as raising tax at source.”
 
He hailed the raising of tax at source for apparel sector, but described the move to impose duty on sugar imports as something ‘not positive’.
 
On the note of defence allocations, the CPD fellow said that Bangladesh’s military spending is a lot less than India and Pakistan.