Budget for 2019-20: Ambitious revenue, unrealistic borrowing targets

The government is set to announce an ambitious revenue income, and unrealistic borrowing targets in the budget for the upcoming fiscal year (FY2019-20), to be unveiled on Thursday.

Revenue target for the National Board of Revenue (NBR) for FY2019-20 has been set at Tk3,25,600 crore, non-NBR revenue at Tk14,500 crore, and non-tax revenue income target at Tk37,710 crore, according to the draft budget document seen by Dhaka Tribune.

The target for NBR, which typically earns around 75% of total revenue income of the government, is 16.02% more than the revised target of Tk2,80,630 crore.

NBR registered only a 7.1% revenue growth during the July–March period of current fiscal year (FY2018-19), falling Tk50,425 crore short of its original target for the nine months.

Senior NBR officials believe the 16.02% growth target will ultimately change to above 20%, as they are certain that the revised revenue target for FY2019-20 will be impossible to achieve.

“Higher revenue target means more tax on people, and tough collection drive from taxmen,” a senior NBR official told Dhaka Tribune.

He said it is always not feasible to impose higher tax on businessmen and ordinary people. "Additionally, logistics and manpower of the NBR to help augment revenue income cannot be increased overnight," he added.

The government set NBR's revenue target at around 40% higher than the earnings of the outgoing fiscal year FY2018-19.

On the borrowing front, the upcoming budget has set a target of borrowing only Tk26,500 crore from savings tools, and Tk54,800 crore from banks.

Furthermore, borrowing target from foreign sources for deficit financing has been set at Tk60,580 crore, which was Tk60,585 crore in FY2018-19.

According to the draft budget document, total budget deficit for the upcoming fiscal year is Tk1,45,380 crore—5% of the gross domestic product (GDP) of next year.

In the first nine months of FY2018-19, the government borrowed Tk68,258 crore from savings instruments, against the yearly target of Tk26,197 crore.

It is widely perceived that the sale of savings tools will reach somewhere around Tk1 lakh as of June, the last month of the current fiscal year.

The budget deficit for FY2018-19 is Tk1,21,242 crore.

Budget outlay for FY2019-20 has been set at Tk5,23,191 crore, excluding allocation for autonomous organizations.

Sources at the Economic Relations Division under the Ministry of Finance said, they would face nearly Tk15,000 crore shortfall from the budgetary target in getting foreign aid this fiscal year.

On the other hand, finance ministry officials said the bank borrowing target of Tk42,029 crore for the current fiscal year would be overshot by as low as Tk10,000 crore.