Government is backing away from ambitious budget.
Major changes are being made to the budget for the upcoming fiscal year 2025-26. Although the government of ousted Prime Minister Sheikh Hasina formulated an ambitious budget in the last 15 years, it was not possible to fully implement it. The budget had to be cut at the end of the year. However, the interim government is planning to prepare a realistic budget. According to the Finance Department, this budget is being prepared with the aim of making it implementable.
According to experts, the budget preparation process in the last years of the previous government was largely a bureaucratic formality ‘form fill-up exercise’. There was a lack of specific plans in terms of budget deficit, social security, revenue collection plans and project priorities, and a lot of ‘ordinary’ circularity developed. In the last few years, inflation, dollar crisis and problems in foreign trade have emerged. Despite this, the size of the budget has increased every year.
After the interim government took office on August 5, various challenges to the economy have come to light. Non-performing loans in the banking sector have increased and the liquidity crisis has intensified. During the previous government, some
economic indicators were artificially inflated, which did not reflect the real picture. Bangladesh Bank has increased interest rates to control inflation, but new investment in the private sector has decreased due to political uncertainty and investment crisis. Therefore, special steps will be taken to bring stability to the financial sector in the upcoming budget.
It is learned that instructions have been given not to include any unnecessary projects in the budget. The Finance Department will present a draft outline of the budget for the upcoming fiscal year 2025-26 to Chief Advisor Dr. Muhammad Yunus on Wednesday. This information was learned from the Chief Advisor’s office. Led by Finance Advisor Dr. Saleh Uddin, Planning Advisor Dr. Wahed Uddin Mahmud, Finance Department Secretary Dr. Khairuzzaman Majumder and National Board of Revenue (NBR) Chairman Abdur Rahman Khan, along with officials of the Budget Unit, will be present at the meeting.
In the recently held budget management meeting, a draft budget of Tk 8.48 lakh crore was presented for the next fiscal year. Out of this, the Annual Development Program (ADP) was set at Tk 2.70 lakh crore. However, instructions have been given to reduce the size of the budget slightly, as a result, the size of the ADP may also be reduced slightly.
In the next fiscal year’s budget, several steps will be taken to increase revenue revenue from the domestic sector. Potential income tax payers will be identified at the district and upazila levels to expand the tax net. The revenue collection target will be rearranged. The revenue collection target for the National Board of Revenue (NBR) was initially set at Tk 5.21 lakh crore in the next fiscal year 2025-26. However, considering the new situation, it has been proposed to reduce it slightly.
Incidentally, the size of the budget for the current fiscal year 2024-25 was Tk 7.97 lakh crore. Out of this, the total revenue collection target was set at Tk 5.41 lakh crore. However, the revenue collection target was reduced by Tk 16,000 crore mid-year, resulting in a new target of Tk 4,63,500 crore. On the other hand, the size of the Annual Development Program (ADP) has been proposed to be set at Tk 2,70,000 crore, which is slightly higher than the revised ADP for the current fiscal year.
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