PM approves Tk7.64 lakh crore proposed budget for FY24

The proposed budget for the fiscal 2023-24, amounting to Tk7.64 lakh crore, has received the nod from Prime Minister Sheikh Hasina. 

During the presentation of the budget allocation estimates at Ganabhaban on Wednesday evening, the prime minister advised taking appropriate steps to ensure stability in the overall economy of the country. 

She emphasised the importance of allocating necessary funds to continue ongoing development activities and adopting a strong fiscal policy to keep the prices of goods at a bearable level.

Officials present at the meeting stated that the prime minister also directed to continue austerity in public expenditure, control inflation, and ensure macroeconomic stability by overcoming the existing instability in the external sector. 

The finance minister is scheduled to present the proposed FY24 budget in the parliament on 1 June. 
Finance Minister AHM Mustafa Kamal, Planning Minister MA Mannan, Bangladesh Bank Governor Abdur Rouf Talukder, Finance Divisions' Senior Secretary Fatima Yasmin, and National Revenue Board Chairman Abu Hena Md Rahmatul Muneem attended the meeting with the prime minister.

During the meeting, the senior finance secretary presented the proposed budget and estimated the GDP growth rate at 7.5% and the inflation rate at 6.5% for the upcoming financial year. 

The central bank governor spoke about the steps the central bank will take in the next monetary policy to keep the inflation rate at the desired level.

Finance Division officials said that the prime minister has instructed them to formulate a budget that ensures economic stability by avoiding unnecessary expenditures. Therefore, even though it is an election year, there will be no expenditures to appease the public.

The next budget will include necessary policy measures to implement various conditions of IMF loans.

"Various proposals are being presented to the prime minister from different ministries focusing on the election, but she is rejecting most of them to prioritise the stability of the macroeconomy. Even though it's an election year, the new budget will not prioritise expenditures that could harm the economy," said an official from the finance Division who attended the meeting.

"The upcoming budget will focus on establishing macroeconomic stability, and necessary policy measures will be included to implement various conditions of IMF loans," he said.

The Finance Division has identified inflation as the primary challenge for the next fiscal year's budget. Additionally, the division has highlighted challenges such as increasing foreign exchange reserves through boosting exports and remittances, meeting the 0.50% increase in tax-GDP ratio as per IMF conditions, and ensuring subsidies and government loans worth more than Tk1 lakh crore.

The Finance Division estimates that the upcoming budget will have a total allocation of Tk7.64 lakh crore, with Tk2.63 lakh crore allocated for the annual development programme and the remainder for the government's operational expenditure. Of the development expenditure, Tk1.69 lakh crore will come from domestic sources while Tk94,000 crore will come from foreign aid.

The remaining Tk5 lakh crore of the budget will be spent in the operational cost sector. In the budget of the current financial year, its amount was Tk4.31 lakh crore. 

Operating expenditure includes Tk77,000 crore for salaries and allowances of government employees, Tk40,000 crore for purchase of goods and services, Tk1.10 lakh crore for loan interest payments, Tk1.18 lakh crore for social security, and Tk1.05 lakh crore for subsidies and incentives which the prime minister has approved.