The budget deficit for the next fiscal year is likely to be 4.6% of GDP (gross domestic product), down from 4.8% estimated for the outgoing fiscal year.
“The overall budget deficit in the current fiscal would come down to 4.8% from previously estimated 5.0%. It would come down further to 4.6% next fiscal year,” said an official at the budget wing of finance division.
Finance Minister AMA Muhith is scheduled to announce the 2013-14 national budget on Thursday as officials are busy giving a final touch to the budget estimates.
The deficit figure would stand at Tk550bn in the next fiscal, showing an increase by nearly Tk5.4bn from about Tk497bn of the outgoing fiscal year. The GDP would stand at Tk11.96tn in FY14.
“The government will require billions of taka to please voters in the election year,” said an official, requesting anonymity.
As per a condition of the International Monetary Fund (IMF) tagged with its Extended Credit Facility arrangement of around one billion dollar, the deficit should be 4.3% of GDP.
The global lender also cautioned that the government investment is expected to go up significantly in 2012-13 fiscal as private investment shrinking due to political turmoil as well as global export image of Bangladesh.
The situation might affect government revenues and export earnings, widening the social safety-net schemes, pay hike and more fund allocation for Padma Bridge.
The government has allocated Tk10bn for infrastructure development in the constituencies of the lawmakers in next seven months, despite same projects under LGRD ministry spent Tk14bn in last four years.
A total of 1.8m new electricity connections would be provided in the rural areas at a cost of Tk10bn while Prime Minister Sheikh Hasina’s priority project of “one house and one farm” would be taken at a cost of Tk2.60bn in the next budget.
And a total of Tk35bn would be allocated for development of primary education sector, according to the annual development programme approved for the next fiscal year.
“These projects are likely to influence the voters by the ruling party lawmakers in the next election,” former adviser to the caretaker government Dr Mirza Azizul Islam told the Dhaka Tribune.
“The political purpose fund has no immediate impact on budget deficit, but the government misses proper utilisation of the fund.”
Around Tk330bn of the deficit would be financed from the local resources and Tk220bn from the external resources.
