Finance Minister to Unveil Ambitious FY25 Budget Amid Challenges

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Finance Minister to Unveil Ambitious FY25 Budget Amid Challenges

Finance Minister Abul Hassan Mahmood Ali is set to present a proposed Taka 7,96,900 crore national budget for the fiscal year 2024-25 at the Jatiya Sangsad (JS) tomorrow. This will be the 53rd national budget for Bangladesh and the 25th presented by the Awami League government across six terms.

This budget, the first by Finance Minister Ali, will focus on addressing the growing challenges of inflation, maintaining foreign currency reserves, stabilizing the exchange rate, and increasing revenue generation. Despite the global economic volatility, the budget aims to build a “Smart Bangladesh” with a projected GDP growth of 6.75% and inflation control at 6.50%.

The proposed budget size represents an increase of approximately Taka 35,115 crore or 4.60% over the previous fiscal year (FY24). Alongside the approved Annual Development Programme (ADP) outlay of Taka 2,65,000 crore, the budget includes an estimated deficit of Taka 2,57,000 crore, including grants. The government aims to limit the budget deficit to 4.6% of the gross domestic product, slightly lower than the usual 5%.

In FY24, the budget deficit stood at Taka 2,61,785 crore. For FY25, it is projected to be Taka 2,57,000 crore. The government will focus on managing expenditures, avoiding high-growth ambitions, and refraining from initiating new mega projects. Instead, the emphasis will be on repaying foreign loans and interest, which necessitates increased revenue collection efforts by the National Board of Revenue (NBR).

The government targets overall revenue of Taka 5,41,000 crore, with the NBR tasked with collecting Taka 4,80,000 crore—Taka 50,000 crore more than the current fiscal year. Key priorities include stabilizing the economy, keeping commodity prices within the reach of the common people, and maintaining decent living standards.

The budget will introduce austerity measures to curb public expenditure while boosting farm productivity and ensuring a stable supply chain. Measures such as continuous market monitoring, expanding social safety nets, and automatic fuel price adjustments will help manage inflation.

Key initiatives in the budget include ensuring food security, improving food supply systems, expanding social safety nets, modernizing villages, enhancing digital health and education systems, fast-tracking infrastructure projects, and addressing climate change impacts. To fund these initiatives, the government plans to borrow approximately Taka 2.75 lakh crore, with over Taka 1.50 lakh crore sourced from the banking system and an additional $1.17 billion from foreign sources.

Subsidies and stimulus packages will receive around Taka 1,20,585 crore, while interest payments for local and foreign loans are allocated Taka 1,08,000 crore and Taka 20,000 crore, respectively. The NBR will enhance efforts to widen the VAT net, including installing EFDs in Dhaka and Chattogram and working with the BRTA, DPDC, and city corporations to identify new taxpayers.

Additionally, the mandatory submission of e-challans for VAT payments of Taka 20 lakh and above will be enforced, down from the current ceiling of Taka 50 lakh. Approximately 20.26 lakh individuals will be newly included in social safety nets to mitigate the impact of inflation.

Yasir Monon
Yasir Monon
Online Editor, Business Mirror

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