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Muhith unveils a Tk 4,00,266 crore budget for FY18 setting growth target at 7.4pc

DHAKA, June 1, 2017 (BSS)-Finance Minister AMA Muhith today rolled out a Tk 4,00,266 crore ambitious national budget for fiscal 2017-18 setting the GDP growth target at 7.4 percent and outlining a set of plans-strategies to build a prosperous, happy and peaceful country by 2041.

"The budget of FY 2017-18 is, indeed, an ambitious one. The budget proposals include necessary administrative reforms in order to implement policy adjustments.

The current trend of establishing good governance through administrative reforms must continue," said the finance minister while placing the proposed budget styled 'Bangladesh on Development Highway: The Time is Ours' at the Jatiya Sangsad (JS).

The size of budget for FY18 is Tk 59,661 crore or 17.52 percent higher than the original budget size of Tk 340,605 crore of the outgoing fiscal FY17.

According to the 153-page budget documents for FY18, Tk 2,41,253 crore has been allocated for non-development expenditure, including other expenses and Tk 1,53,331 crore has been earmarked for Annual Development Programme (ADP).

Tk.10,753 crore has been allocated for projects to be implemented through self-finance of autonomous bodies. As a result, the total size of the ADP will stand at Tk 1,64,085 crore. The target for containing inflation in the next fiscal has been set at 5.5 percent.

The overall budget deficit will be Tk 1,12,276 crore which is 5.0 percent of GDP. Of the amount, Tk 51,924 crore will be financed from external sources and Tk 60,352 crore from domestic sources. Of the domestic sources, Tk 28,203 crore is expected to come from banking system and Tk 32,149 crore from savings certificates and other non banking sources.

The salaries and allowances of government servants, interest payment and subsidies will account for over half of the non-development expenditure.

In the proposed budget, 29.31 percent of the total outlay has been allocated to social infrastructure sector (of which 26.12 percent has been proposed for the human resource sub-sector) and 24.03 percent of the total allocation has been proposed for the general services sector.

Besides, 1.88 percent has been allocated for public private partnership (PPP), financial assistance for various industries, subsidies and equity investment in state-owned banks, and financial institutions; 10.36 percent for interest repayment; and the rest 2.68 percent for net lending and miscellaneous expenditure.

The overall revenue collection target for the next fiscal has seen set at Tk 287,990 crore of which Tk 248,190 crore will come from the NBR sources.

Alongside, the amount of foreign assistance has been estimated to be Tk. 51,924 crore.

The revenue target is expected to be achieved due to our recent initiatives for revising fees/rates in consistence with market rates and improved monitoring system, the finance minister added.

"I am very much confident that the NBR will achieve the revenue target for fiscal year 2017-18 by adopting modern tax policy, efficient tax management system and ensuring participation of all stakeholders including the business community," said the finance minister.

The minister has kept the tax exemption threshold unchanged for the next fiscal year except that the thresold for person with disability will be Tk 400,000 in place of Tk 375,000.

In the budget speech Muhith has proposed to expand social security coverage including rising the number of recipients of old age allowance, widow and oppressed women, increasing the rate of allowance for financially insolvent disabled persons and transgender people.

He has also announced special social protection scheme for Haor areas. Muhith has also highlighted the present government's successes in meeting the energy crisis when GDP growth met target, inflation was also kept under control, and the country saw significant improvement of various administrative and financial services in the past one year.

In order to mobilize revenue, in this budget, the finance minister has emphasized the need to increase tax compliance without increasing tax rate. This budget proposal also includes necessary administrative reforms in order to implement policy adjustments.

"I expect that by implementing the budget proposals revenue targets will be achieved and culture of tax compliance will further deepen," he added.

Muhith said the size of economy is growing day by day and by next two decades, Bangladesh will become one of the top thirty economies of the world.

As the trade and commercial activities are expanding, the investors expect continuity in tax policy and long term stability, he said, adding that in this circumstance, in tax reforms, the government has laid emphasis on three areas in this budget: (a) continuity and stability of tax policy, (b) transparent enforcement procedures, and (c) simplified business operations.

The finance minister said Bangladesh is marching towards development under the leadership of Sheikh Hasina and golden days of prosperity are now beckoning the nation. The time has come to rise above all partisan views, envy and violence and march ahead on our journey towards light under the bold statesmanship of the Prime Minister, he added.

"We will have to achieve a growth of 8 to 9 percent in order to accomplish the vision of 2041. To this end, along with capital accumulation, productivity of factors of production needs to be increased extensively," he said.

Production processes must undergo fundamental changes by way of using new technology and advanced management while ensuring excellence in production skills, Muhith said, adding that for this purpose, the current trend of establishing good governance through administrative reforms must continue.

"In tandem, the efforts to expand international trade must continue. In order to accomplish all these tasks in a planned manner, we are going to formulate the second Perspective Plan under the Vision 2041," said the finance minister.

"The time has arrived for all to march ahead by coming together burying all differences and shunning the path of envy and violence. Let us now prepare for a prosperous, happy and peaceful Bangladesh of 2041," he said.

Prime Minister Sheikh Hasina, leader of the opposition Rawshan Ershad and cabinet members were present when Muhith placed the 4th budget of Awami League government that returned to power for a second consecutive term after January 5, 2014 polls.

In line with the legal procedures, President Abdul Hamid authenticated the proposed national budget for the coming fiscal and the revised budget for the outgoing 2016-17 before the finance minister placed it before the House.

The cabinet earlier in a meeting at the Sangsad Bhaban with Prime Minister Sheikh Hasina in the chair approved the budget, which is expected to be passed on June 29.

Source: Bangladesh Sangbad Sangstha (BSS)