Around 20 days after being tabled at the Jatiya Sangsad (National Parliament) on June 9, Bangladesh’s National Budget for Fiscal Year 2011-2012 was passed on June 29 at the parliament.
The country’s biggest budget, with 1.63 trillion taka (US$22 billion), is nearly 28% bigger than that of the current Fiscal Year which ends on June 30. The budget will see a deficit of Tk 452.04 billion excluding grants, the finance minister Abul Maal Abdul Muhith had said while tabling it on June 9.
Muhith projected an increase in the fiscal deficit to 5% of gross domestic product (GDP) targeted at 8.9 trillion takas, up from a revised 4.4% of GDP in the fiscal year that ends this month. To meet the deficit, the government plans to borrow around 130.58 billion takas from foreign sources and 272.08 billion takas locally.
Muhith said the government will take “unpopular” decisions such as reducing subsidies, money supply and private-sector credit growth to bring down inflation to 7.5% from a current 10.7% as recorded in April and a revised 8% full-year inflation target for the 12 months to June 31, 2011.
Of the total budget outlay, the government proposes to spend 1.03 trillion takas on the non-development sector, including 165.19 billion takas to repay internal debts and 14.78 billion takas to pay back foreign loans; 506.42 billion takas was earmarked for development activities.
He fixed 460 billion takas for the Annual Development Program (ADP), a possibly ambitious target as only 60% of the present year’s 358 billion takas for ADP has been implemented.
As the Daily Star reported, a total of Tk 957.85 billion is expected from tax revenue and Tk 226 billion from non-tax revenue. The finance minister expects foreign grants of Tk 4,938 crore for the upcoming budget.