Former Bangladesh Bank Governor Dr Salehuddin Ahmed has said that the major challenges for the upcoming national budget for FY 15 would be its implementation as well as achieving the revenue collection target.
“Fulfilling the target of revenue collection for the next fiscal year (FY 15) will be a big challenge for the government. If the government could accomplish that task, then it would be a big achievement,” he told UNB in an interview ahead of the national budget for fiscal 2014-15 which will be placed in Parliament on June 5.
The former central bank Governor said that following continuity of the previous few fiscal years as well as considering the country’s growing demand, the possible budget of Tk 2.50 lakh crore would not be huge.
He said that in emerging countries like Bangladesh, much more emphasis on communication, railway, poverty alleviation and power and energy sectors is fair, but in terms of implementation capacity the budget might be ambitious.
In this context, Dr Salehuddin cited the lack of efficiency and implementation capacity of the various executing agencies of the government.
About the possible revenue collection target of Tk 1.50 lakh crore for the next year, he said it would be tough to attain that possible target if the income tax net is not widened further, the tax collection method is not made further transparent and the hassles in tax realization process are not reduced. Targeted revenue collection will help keeping the budget deficit within five percent of the GDP.
“The revenue collection from the customs would decline gradually while it would be difficult to make the expected expenditure if there is no targeted revenue collection,” he added.
The former Bangladesh Bank Governor also noted that there may be a downward trend in VAT collection as the retail sales have decreased to some extent while there are also leakages in VAT collection.
According to the National Board of Revenue (NBR), the government has recently reduced the revenue goal for the 2013-14 fiscal from Tk 136,090 crore to Tk 125,000 crore in the revised budget, following a huge shortfall in collection, mostly due to political unrest and an ambitious target.
Listing some sectors and areas that should get priority in the next budget, Dr Salehuddin said that alongside the communication, power and gas sector, and health and social safety net sectors, there should be focus on ensuring qualitative education through ensuring necessary educational equipments.
About the recently approved Tk 86,000 crore ADP for FY 15, he noted that the government lacks capacity of implementing such huge ADP as it would be tough to find capable Project Directors for such huge number of projects. Side by side, it would also be impossible for IMED to monitor such a huge number of 1,187 projects.
Dr Salehuddin said that the government from the very beginning of the new fiscal year should focus especially on implementing the priority projects and also to those which will facilitate the private sector growth.
Supporting the Finance Minister’s decision not to continue the scope for whitening black money further, he said that the facility could draw a very negligible response over the years as it also put impediments to those honest businessmen who want level playing field.
The former Bangladesh Bank governor also opined that it would be difficult to mobilize the targeted project assistance from the development partners if the project implementation capacity by the executing agencies is not enhanced alongside ensuring qualitative implementation standards of the projects.
Finance Minister AMA Muhith is likely to announce the country’s 43rd budget and the 15th budget of the Awami League government on June 5.
The budget for the current 2013-14 financial year (FY14), announced on June 6, 2013, was the last budget of the previous five-year tenure of the Awami League-led grand alliance government that came to power in a land-slide victory in 2008 general election.
The Finance Minister has already indicated that the size of the national budget would be around Tk 250,000 crore. The original size of the budget for the current FY14 was Tk 222,491 crore, which was later revised to Tk 211,220 crore.
Source: UNBConnect
