Special Correspondent
Finance Minister AMA Muhith on Thursday placed a Tk 2,22,491 crore proposed national budget for the fiscal year (2013-14) in parliament eying a 7.2 per cent GDP growth rate.
The last budget of the Awami L-led grand-alliance government also looks to contain the average inflation rate at 7 percent. The proposed budget is also 18.7 percent of GDP.
Muhith in his budget speech pointed out that it is a common knowledge that in the election year, GDP decelerates and falls below the average level.
“You might also have noted that this year, neighbouring India and the emerging Asian economy Vietnam both have achieved GDP growth close to 5 percent. This is also the regional average.” “In my opinion”, Muhith said, “Given the adverse global economic and domestic scenario, the real GDP growth of 6.3 percent is not a mean feat. However, I firmly believe if we could prevent the recent violent political programmes, the GDP growth for the current fiscal would be higher.”
According to projections, the growth will accelerate in agriculture, industry and service sectors propelled by the positive momentum in the world economy in 2013 and afterwards, he said.
“Side by side, steps taken by us in tackling supply side constraints in power, energy and communication sectors will considerably mitigate the infrastructure deficit,” Muhith said.
He said the production of crops to be impressive this year leading him to believe that inclusion of all these data would definitely push up GDP growth number to at least last year’s level.
“Another important point that you may like to note is that this year the private investment may slightly slide down. However, the public investment as percentage of GDP is going to rise to 7.85 percent from 6.5 percent,” he said.
Finance Minister hoped that the overall inflation will be reduced to 7 percent in the next fiscal (2013-14) and to 5.5 percent in the medium term.
“I hope that overall inflation will be reduced to 7.0 percent in the next fiscal year and to 5.5 percent in the medium term,” he said in Parliament, while placing the national budget for fiscal 2013-14.
Muhith said that according to the projection, stability in energy prices currently prevailing in international markets will continue in 2014 as well. Besides, fertilizer and food prices may slightly fall.
“I expect food inflation will come down to a tolerable level due to satisfactory domestic agricultural production and downward trend of food prices in the international market.”
He also told the House that the untiring efforts have been successful in bringing down inflation to a tolerable level, returning comfort to peoples’ lives.
The budget also set a revenue income target of Tk 1,67,459 crore which is 14.1 percent of GDP, of which NBR tax revenue is Tk 1,36,090 crore (11.4 percent of GDP).
The revenue from Non-NBR sources has been estimated at Tk. 5,129 crore (0.4 percent of GDP). Besides, Tk 26,240 crore (2.2 percent of GDP) will be collected as Non Tax Revenue (NTR).
The allocation for non-development and other expenditure has been estimated at Tk 1,56,621 crore (13.2 percent of GDP). The expenditure for ADP has been estimated at Tk 65,870 crore (5.5 percent of GDP).
The overall budget deficit will be Tk. 55,032 crore which is 4.6 percent of GDP. Of this amount, Tk. 21,068 crore (1.8 percent of GDP) will be financed from external sources and Tk. 33,964 crore (2.9 percent of GDP) from domestic sources.
Of the domestic financing, Tk. 25,993 crore (2.2 percent of GDP) will come from the banking system and Tk. 7,971 crore (0.7 percent of GDP) from savings certificates and other non-banking sources.
Considering the issues of prevailing inflation, increasing living expenses and the necessity of reducing tax liability of marginal taxpayers, Finance Minister proposed to increase the threshold of tax free income for individual taxpayers from Tk 200,000 to Tk 220, 000,” he said in Parliament while placing the budget for next fiscal (2013-14).
Muhith also proposed to increase such threshold for women taxpayers and also senior citizens aged over 65 years from Tk 225,000 to Tk 250,000 and for the physically challenged taxpayers from Tk 275,000 to Tk 300,000.
Besides, in line with the pledges of the present government to establish a society based on equity and justice through reduction of economic disparity, he also proposed to reduce and fix the minimum tax for the individual taxpayers living in the Paurasava area of district town at Tk 2,000 and the taxpayers of other places including villages at Tk 1,000 while retaining the minimum tax at Tk 3,000 for the taxpayers living in the city corporation areas.
“Such reduction in payment of minimum tax, I believe, would motivate the taxpayers in the rural areas to pay tax with effectual impact in widening the tax net,” he said.
The Finance Minister proposed to retain the corporate tax rate for the financial year 2013-2014 same as the outgoing financial year 2012-2013.
But considering the public health and environmental hazards, he proposed to increase the tax rate for publicly traded and non-traded cigarette manufacturing company along with rationalization of tax at source on banderole of bidi.
The new rate for publicly traded cigarette manufacturing company was proposed to 40 percent from 35 percent while for the non-traded cigarette manufacturing company was proposed to 45 percent from 42.5 percent.
Muhith also proposed to reduce the gap of tax rates between publicly traded and non-publicly traded mobile phone company. He proposed to increase the tax for publicly traded mobile phone company to 40 percent from 35 percent.
The tax rate for the non-publicly traded mobile phone company will remain the same as the current fiscal (45 percent).
Finance Minister AMA Muhith has proposed an allocation of Tk 14,565.51 crore for the Ministry of Defence, including the Armed Forces Division, for fiscal 2013-2014.
“We’re committed to building a strong and modern defense force capable of meeting the challenges of the 21th century. Today, our armed forces, which made glorious contributions to our Liberation War, are discharging their overseas peacekeeping duties with reputation,” Muhith said in his budget speech on Thursday.
Praising the role of the members of the Armed forces in different UN peacekeeping missions, the Finance Minister said Bangladesh currently tops the list of countries sending troops to UN peacekeeping mission. “As many as 6,987 Bangladeshi peacekeepers are engaged in UN peacekeeping missions.”
Source: Weekly Holiday
