FY 2013-14 Budget Structure

FY 2013-14 Budget Structure
Medium Term Assumptions
Honorable Speaker
42. Now I would like to reflect briefly on the overall budget structure
of FY 2013-14. I have prepared the budget for next fiscal year based
on a Medium Term Macroeconomic Framework. The building blocks
of this framework are - continuity in pursuing existing monetary and
fiscal policy strategies and sustaining macroeconomic stability. It is
presumed that the global growth will fairly increase in 2013 and
afterwards. As a result, Bangladesh’s trade, investment and manpower
export will gain further momentum. In the Table 9 of Appendix A, a
matrix on budget structure and in Tables 10 and 11, data on the overall
budget and sector wise ADP allocations have been presented.
43. We are widening fiscal space by scaling up the revenue
collection program through comprehe
nsive reform initiatives and
ensuring public expenditure control. Our aim is to channelize
additional resources to vital
growth-supportive projects. In case
of investment expenditure, we are focusing on implementing quality
projects. Besides, we are continuing reforms with a view to increasing
the monetary space. We expect the space created by fiscal and
monetary sectors will have a conducive impact on investment
environment and facilitate 7.2 percent growth in FY 2013-14, raising it
to 8 percent in FY 2014-15.
44. A number of factors will buttress agricultural growth – such as
innovation in high yielding rice and paddy seeds, extension at the field
level, provision of target based agricultural
assistance, increase of agricultural credit
flow and inspection, supply of uninterrupted
power for irrigation, diversification of agricultural products along with
extension of marketing facilities.
Fiscal and Monetary Space

Growth in
Agriculture Sector

24
45. 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. On the other hand, we will keep on pursuing our
strategies of tight monetary policy and fiscal consolidation. In addition,
the increase of foreign exchange supply will keep the exchange rate of
Taka stable. In these circumstances, 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.
Budget Structure: Table 9
46. Now I will briefly present the proposed revenue and expenditure
estimates for FY 2013-14:
47. The revenue income for FY 2013-14 has been estimated at 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). Revenue from Non-NBR sources has
been estimated at Tk. 5,129 crore (0.4 percent
of GDP). In addition, Tk. 26,240 crore (2.2 percent of GDP) will be
collected as Non Tax Revenue (NTR).
48. The total expenditure for FY 2013-14 has been estimated at Tk.
2,22,491 crore (18.7 percent of GDP).
The allocation for non-development
and other expenditure has been estimated at Tk. 1,56,621 crore (13.2
percent of GDP). Expenditure for ADP has been estimated at Tk.
65,870 crore (5.5 percent of GDP).
49. 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
Containing Inflation

Estimates of
Revenue Income

Estimates of Expenditure

Budget Deficit
and Financing

25
system and Tk. 7,971 crore (0.7 percent of GDP) from savings
certificates and other non-banking sources.
50. Following our usual practice, we have determined the size of
ADP by taking into account regional parity, improved infrastructure
and quality of expenditure. Country’s development got precedence
over election targets. For the sake of transparency, we have included
the self-financed projects of auto
nomous bodies in the next year’s
ADP. We strongly believe in our citizen’s right to information. As
these entities are public enterprises,
people have a right to know about their
overall activities.
In the past, the development programs of
autonomous bodies used to be in
cluded in the ADP. These projects
pass through the regular project appr
oval process. I trust the future
government will pursue the same policy. The total investment scenario
has been presented showing the activities of the autonomous bodies
separately, as the budget has been prepared on the basis of the revenue
mobilization possibilities. In the ADP for FY 2013-14, human resource
sector (education, health, and other related sectors) will receive 23
percent, overall agricultural sector (agriculture, rural development and
rural institution, water resources and other related sectors)
25.4
percent, power and energy sector 17.2 percent and communication
sector (road, railway, bridge
s, and other related sectors)
2
3.1 percent
and other sectors 11.3 percent of total allocation.
Overall Expenditure Structure: Table 10
51. Now, I would like to give a brief outline of the overall
expenditure (development and non-development) structure of the
proposed budget. We have classified di
fferent ministries/divisions into
three groups based on their
functions - social infrastruc-
ture, physical infrastructure and general service sectors. In the
proposed budget, 23.17 percent has been allocated to social
infrastructure sector, of which 19.6 percent has been proposed for
human resource (education, health, and other related sectors), 30.18
percent of total allocation has been proposed for physical infrastructure
sector, of which 14.50 percent has been proposed for overall
ADP Implementation

Overall Expenditure Framework

26
agriculture and rural developmen
t, 8.66 percent for overall
communication sector and 5.1 percent for power and energy sector.
22.45 percent of total allocation has been proposed for general services
sector. 3.29 percent of total allocation has been proposed for Public-
Private Partnership (PPP), financial
assistance for different industries,
subsidy, and equity investment in nationalized banks and financial
institutions. 12.47 percent has been proposed as interest payments.
Remaining 8.44 percent will be spent for net lending and other
expenditures. Hopefully, the budget framework proposed in view of
the domestic and global perspectives will support growth, contain
inflation and reflect aspirations of the mass people.