Budget deficit likely to be 7.46% of GDP

Even as the National Board of Revenue imposes more supplementary duties on imports, the budget deficit is likely to widen further to 7.46% of gross domestic product by the end of the new fiscal year, according to Finance Division prediction. The budget deficit will increase to Tk1,66,000 crore from the current target of Tk1,12,276 crore, officials said. The total rise of the deficit will be Tk44,834 crore while the size of the total GDP outlay will be Tk22,23,600 crore. Finance Division officials said the NBR may collect Tk2,05,000 crore compared to earlier target of Tk2,48,190 crore in tax because of the non-implementation of the new value-added tax law. According to the preliminary data, the NBR exceeded the revised target of overall tax collection of Tk1,85,000 crore last fiscal year. The achieved amount is Tk1,85,071 crore. “It’s a good news that the NBR achieved the revised tax collection target last fiscal year though the actual target was Tk1,70,000 crore,” said an official. The total tax collection target set for the NBR in the last fiscal year was Tk2,03,152 crore. NBR Chairman Nojibur Rahman, on his Facebook post, said the if NBR was “not so engaged with the efforts to implement the new VAT law, there would have been more collection last fiscal year. He said an additional amount of Tk22,579 crore could be collected as VAT, especially from large business organisations this fiscal year, if the new law was implemented. Finance Division sources said the deficit could be wider than Tk1,66,000 crore this fiscal year if the planning ministry fails to implement development projects of Tk57,000 crore funded by foreign sources. According to the Planning Commission, an amount of up to Tk40,000 crore foreign aid, out of Tk57,000 crore, can be disbursed in the current fiscal year. A high official of the Finance Division said the budget deficit will widen by up to Tk10,000 crore. But he said the deficit will be met by loans from banking system and saving instruments. However, State Minister for Finance MA Mannan said the current fiscal year’s budget deficit will increase by up to Tk20,000 crore. He said the deficit will be met by loans from commercial banks.