Editorial
The new budget
Tackling problem areas?
Today, we are giving our comments in broad strokes on the national budget. More exhaustive and deeper analysis would follow in our various pages in the coming days.This is the fourth budget to be placed before the House by the present government and it also happens to be the largest one standing at an estimated Tk1.97 trillion that is 17.2% higher than previous year's and GDP growth rate is targeted at 7.2%.
Looking into this year's budget structure, it is not surprising to find that there is carryover from the previous budget,a large number of unimplemented programmes. It is hoped that this year's planning on important projects like power and infrastructure will be prioritised for fast-track implementation. Moving on, the massive increase in outlay comes due to substantial rise in subsidy payments. Given NBR's stellar performance in outstripping all expectations in revenue collection, it is not surprising that the target has been set at around Tk1,397 billion, or about 18% higher than what was projected in the original budget for the outgoing fiscal.
There exist a number of problem areas that will have to be addressed in the current budget. These are high rate of inflation, investment, employment and accelerating institutional and policy reforms. Policymakers will have to address the issues related to power and infrastructure problems which unless addressed, threaten to drag down the projected GDP growth rate. The institutional weaknesses associated with failure to implement externally-aided development projects is another major hindrance, but perhaps the weakest link in government machinery that has become visible during last fiscal is public finance. The soaring expenditure coming primarily from mounting subsidies, coupled with a general lack of support from foreign and non-bank sources of finance have not helped matters. There is little to suggest that global oil prices will stabilise anytime soon and hence there is little scope to cut back on fuel subsidy in the current fiscal. It is however imperative that steps are taken to reduce dependence on banking system for budget deficit financing. Given the current domestic scenario, it is hoped the government will take moves toward greater mobilisation of foreign resources to meet its budget deficit.
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