Planning and Education Adviser Dr Wahiduddin Mahmud has said that while the budget is usually revised in March, the interim government plans to revise it earlier in February.
However, reducing the revenue budget seems challenging, so the development budget will need to be adjusted instead, while inflation remains a major challenge for the government.
After the Executive Committee of the National Economic Council (Ecnec) meeting on Monday, he shared this information at a press conference.
The adviser said: "Typically, the revised budget is prepared in March. However, we aim to revise it earlier this year, requiring some forecasts. For example, how much revenue is being collected by the National Board of Revenue (NBR) and how much foreign aid has been received. Based on these, we will determine the size of the development budget while maintaining a tolerable budget deficit. The responsibility to balance this lies with the development budget, keeping other sectors stable. This is necessary for overall stability; we cannot afford a high deficit budget."
He further said: "Meeting various demands from government employees involves increasing certain allowances and salaries, including dearness allowances. Therefore, reducing expenses in the revenue sector is very challenging. This burden shifts to the development budget. However, a smaller development budget does not necessarily harm growth. Even with significant investments in a single year, production in any sector takes time. In our country, especially in rural areas, poverty alleviation does not require massive investments but rather projects that generate employment and benefit people. The key is not the size of the budget but whether projects are serving the people."
Dr Mahmud emphasized that controlling inflation remains a major challenge.
"Inflation is reducing slightly but not significantly. It must be brought down to maintain overall economic stability. However, inflation and price levels are not the same. For example, potato prices are high, but if they remain stable, there is no inflation in potato prices. Many may not understand this distinction."
He also said: "The increase in remittances is very good news. The balance of foreign transactions has improved. However, inflation has not yet reached a tolerable level. To address this, the Bangladesh Bank has adopted a contractionary monetary policy. The Finance Ministry is focused on determining where subsidies and salary increases are needed. We have been busy cutting unnecessary projects. Now is the time to align monetary policy, fiscal policy, and the Annual Development Programme (ADP) to determine the overall size of the budget and prepare a revised budget."
He suggested that preparing the revised budget by the end of January would be ideal, but if it is finalized in February, everyone will benefit.
Bangladesh Bank would gain clarity on its contractionary monetary policy, and the Finance Ministry would identify the necessary budget deficit and foreign aid requirements.
The Planning Ministry could focus on completing projects efficiently.
He concluded by saying that without increasing employment, public suffering will not be alleviated.