Proposed Budget for FY 2017-18
Loan interest, pension, gratuity burden to be Tk 64,397cr
Jagaran Chakma
The government will have to spend Tk. 64,397 crore to repay loan interest and to make pension and gratuity payments in FY 201718, according to finance minister AMA Muhiths proposed budget.
This amount is almost 16 per cent of the total budgetary outlay and 31 per cent of the revenue projected for FY 201718.
The total size of the proposed budget is Tk. 4, 00,266 crore, which is18 per cent of the next fiscal years estimated GDP.
According to the proposed budget, the estimated GDP size of the next financial year is Tk. 22,23,600 crore.
The proposed budget indicates that the government will make repayments of loan interest to the tune of Tk. 41,454 crore, which is around 25 per cent of the revenue budget. In the current fiscal year, it was Tk 39,951 crore, while it was Tk 33,114 crore in the previous year.
Out of the total loan interest, the government will repay Tk. 39,511 crore for domestic loan and Tk. 1,946 crore for foreign loan.
Besides, the government will have to provide Tk 22,940 crore as pension and gratuity of retired government employees and
officials.
The figure is increasing every year and emerging as a burden on the government, which will have to spend around 11 per cent of its revenue budget for this purpose.
In the current FY, the government has allocated Tk 12,667 crore in this regard, while it was Tk 10,632 crore in the previous year.
Former Bangladesh Bank (BB) governor Dr Saleh Uddin Ahmed told this correspondent that government spending on the repayment of loan interest was increasing yearly.
While the government is paying the interest of previous loans from both domestic and foreign sources, the interest on new loans are being added to the existing burden.
If the dependency on loans to meet the deficit is not cut, this interest payment process will never stop, added Saleh Uddin Ahmed.
The former BB governor said the government should be pragmatic in using domestic loans, as they were costlier compared to foreign loans.
The increasing amount of outstanding loan will impose a burden on the future generation. The government should not make up the budget deficit by resorting to domestic borrowing, he added.
Finance minister AMA Muhith has proposed to kept a deficit of Tk. 1,12,276 crore (excluding grant), which is 5 per cent of the GDP for FY 2017-18.
Proposing the Tk 4,00,266 crore budget in Parliament, Muhith has said Tk. 51, 924 crore of the shortfall would be financed by external sources, while the remaining Tk 60,352 crore would come from domestic sources.
According to finance ministers plan for the domestic sources, Tk. 28,203 crore (1.3 % of GDP) will be mobilised from the banking system and Tk. 32,149 crore (1.4 % of GDP) from savings certificates and other non-banking sources.
Out of the total banking system borrowing, the finance minister plans to take Tk. 20,887 crore as long-term debt and Tk 7,316 crore as short-term debt.
On the other hand, Muhith has set the target for revenue collection at Tk. 2,87,991 crore in the next fiscal year. The National Board of Revenue (NBR) would have to provide Tk. 2,48,190 crore (11.2 per cent of GDP) of the targeted outlay.
The target for Non-NBR tax revenue collection has been fixed at Tk. 8,662 crore. The target of non-tax revenue collection has been set at Tk. 31,179 crore.
