Budget prep mired as ministers on tour

The preparation for the next fiscal year’s budget seems to get locked as decisions on some vital matters including the value-added tax issue are still pending.

Officials said ministers concerned and the NBR chairman have gone out of Dhaka keeping the decisions pending while the budget announcement is just two weeks away.

Prime Minister Sheikh Hasina approved the budget allocations for different ministries and divisions before leaving for the United Kingdom on an official tour, said Finance Division officials.

She also approved the current fiscal’s revised annual development programme and next fiscal’s annual development programme.

“This is the old path Bangladesh is following as budget preparation gets stuck only for few decisions. How can we compete with India and China,” an official said.

Finance Minister AMA Muhith will propose budget allocations for different sectors and interest groups after coming to Dhaka. He is due to arrive today from Indonesia.

NBR Chairman Nojibur Rahman will return home from Moscow two days later while State Minister for Finance and Planning MA Mannan will arrive in Dhaka one day before budget announcement.  

Muhith is expected give decisions on the issues including government’s bank borrowing, recapitalisation fund for state-owned banks, enforcement of the new VAT law, allocation for project implementation under the Public-Private Partnership in the upcoming fiscal year.

Finance ministry sources said other major decisions like  formulation of a capital budget for mega projects, which is supposed to be incorporated in the FY2017 budget, are also pending.

Senior Finance Secretary Mahbub Ahmed said: “The issues of re-capitalisation funds, PPP allocation and allocation for capital budget in the next budget are confidential matters. However, funds for the sectors are now at calculation stage.” 

Former Finance Adviser to Caretaker Government AB Mirza Azizul Islam said: “It is unexpected that ministers and secretaries are not in the country just a few days before budget announcement. This is crucial time.”

He said decision on the VAT issue is important as the business people are opposing the new law. He said it’s also important to determine figure of the government’s bank borrowing in the new fiscal year.

According to the government estimates for the FY2017, the economy will grow at 7.2%, inflation rate will be ate 5.8% and revenue earning Tk2,49,000 crore.