The budget for the next fiscal year is expected to be placed in parliament on Thursday with an outlay of over Tk2.22tn.
It will be approximately Tk332bn, or 17.5%, higher than the revised budget of the current fiscal year and Tk307.5bn, or 16%, higher than the actual allocation for FY2012-13, according to highly placed government sources.
Finance Minister AMA Muhith is scheduled to place the election year budget at 3pm.
The upcoming budget is set to inject huge funds to recapitalise state-owned commercial banks and the capital market, depending heavily on domestic borrowing, said a senior government official.
State-run banks have been facing a capital crisis since the Hall-Mark credit scam, while the stock market has been in need of revival since its debacle, after December 2010.
Of total expenditure, it is estimated that Tk1.7tn will come from revenue earnings, an outlook which is about 20% higher than the Tk1.4tn, which is the revised as well as actual revenue target, for the outgoing fiscal year.
Regarding the revenue target, tax revenues are estimated to be Tk1.4tn, with Tk1.36tn from NBR taxes and the remaining TK51bn in non-NBR tax. Non-tax revenue is estimated to be Tk262bn and foreign grants have been estimated to be Tk67bn.
The overall deficit would then stand at around Tk550bn or 4.6% of GDP, declining from 4.8% of the revised deficit of the current fiscal year.
About Tk144bn of the deficit will be financed through external loans. The estimate is about Tk25bn, or 21%, higher than the revised foreign loan estimate of Tk119bn for the current fiscal year.
Tk340bn will be financed through domestic borrowing – about Tk260bn from the banking system, Tk79.7bn from non-banking sources, and Tk49.7bn through national savings schemes.
Borrowing from the banking system is declining by 8.8% in the next fiscal year, from the revised target of Tk285bn, which has been increased by Tk55bn or nearly 24%, from the actual allocation of Tk230bn for the current fiscal year.
Borrowing through the national savings instruments will increase by about Tk30bn or 151%, in the next fiscal year from Tk19.7bn, which was revised down from Tk74bn of the actual target, for the outgoing fiscal year.
Regarding total expenditure, the annual development programme increased by 25% to Tk659bn in the next fiscal year, while non-development expenditure is increasing by 21.5% to Tk1.34tn.
Of non-development expenditure, interest on domestic borrowing is estimated to be increased by
over 20% to Tk260bn, while non-development capital expenditure is going to increase by over 171% to Tk210bn. Investment in shares and equities have been included in non-development capital expenditure.
