The government has prepared a budget outlay of Tk2.98tn with a deficit of 5.3% of GDP for the next fiscal year (2015-16), which is scheduled to be discussed at the Prime Minister’s official residence Gonobhaban today.
The cabinet ministers including finance, planning and commerce are expected to attend the meeting, which is likely to finalise it after considering the small details of the budget, Finance Ministry officials said yesterday.
It would consider issues, including the revenue collection target, allocation for implementing new government pay scale, corporate tax issue and ways to attract foreign investment.
The proposed budget will be 23.85% higher than the previous fiscal’s revised budget of Tk2.40tn.
The next fiscal year’s budget deficit is likely to cross Tk900bn from the earlier estimated Tk862bn as the Annual Development Programme has been fixed at Tk970bn.
The growth rate of gross domestic product (GDP) is likely to be finalised at 7.2% for the new financial year.
Finance Division officials said most of the budget deficit is likely to be handled by issuing government bonds, which could raise nearly Tk600bn while Tk304bn will come from foreign sources as assistance.
In the next budget, interest of the savings instruments will be lowered to 8% from the existing 13% because of pressures from the country’s banking sector as the bankers predict a huge amount of liquidity and idle money in banks.
Regarding the budget deficit, an official said the budget deficit is likely to cross 5% of GDP for the first time which may create pressure on the foreign money market.
The meeting will also settle other disputed issues including budget deficit, bank borrowing, state banks’ capitalistion fund and subsidy amount.
The government revenues are projected to drop to Tk1.35tn from Tk1.49tn this fiscal year – leaving more than Tk613bn in deficit. The next fiscal year’s revenue earnings are estimated to be Tk1.76tn.