Govt in a fix over revised budget
The finance division is facing a difficult situation in fixing the size of the revised budget as many ministries and divisions are demanding additional funds amid shortfall in revenue collection.
The division has prepared a draft of the revised budget for the current fiscal year, leaving out the additional amount the ministries and divisions are demanding from the government coffer.
According to the draft outlay, the budget size may be reduced to Tk 450,000 crore, down 3.13 percent from the original budget of Tk 464,573 crore.
The amount of the budget cut will depend on the revised annual development programme (ADP), said a financial ministry official.
He said the ministry has sent a resource allocation proposal to the planning ministry, which was working on the revised ADP. If the revised ADP size is set in line with the resource allocation, the budget size will be cut by about 3 percent.
The ADP may revise down to Tk 165,000 crore from the original Tk 173,000 crore.
In the ADP, the allocation of foreign aid will be reduced to Tk 51,000 crore, from Tk 60,000 crore in the original allotment.
A planning ministry official says the ministries and the departments concerned have also confirmed that they would not be able to spend Tk 9,000 crore of the foreign aid. On the other hand, the government portion in the ADP may be set at Tk 114,000 crore, from Tk 113,000 crore in the original budget, although 35 ministries and divisions have demanded an additional Tk 36,000 crore.
The revised ADP will be fixed very soon at a meeting of the National Economic Council, the finance ministry official said. Besides, a number of fresh projects were approved before the general elections in December last year and if they are given even a token amount, the government's contribution to the ADP will have to be increased significantly during the revision, he said.
However, the finance ministry may not be able to allocate funds as per the demand of the ministries and division, as it would have to keep the budget deficit within the standard practice of 5 percent.
The demand for the additional funds came although the revenue collection has remained slow so far in the current fiscal year. In the first six months of 2018-19, the tax collection growth stood at 6.36 percent, in contrast to 14.92 percent logged during the same period a year earlier.
The government has set a revenue collection growth of 29 percent compared to that last fiscal year although it has been hovering around 16 to 20 percent for the last few years.
Officials of the National Board of Revenue said it would be difficult to pull off the average growth in the fiscal year.
In July-December, the NBR collected Tk 98,027 crore, which fell short of Tk 28,000 crore of the half-yearly target. The shortfall has widened further in the first eight months.
The government has set a revenue collection target of Tk 296,201 crore and the NBR informed the finance division that it may collect up to Tk 260,000 crore finally.
The finance ministry may set the revised target at Tk 280,000 crore.
