Budget 2023-24: Smart Bangladesh and Job Creation in Focus

In a recent Executive Committee of the National Economic Council (Ecnec) meeting, nine out of eighteen approved projects underwent cost revisions, indicating a trend towards the end of the financial year. The original cost of these projects, amounting to Tk9,308 crore, has now risen to Tk23,978 crore.

Bangladesh's budget deficit projection for FY24 could face challenges if economic growth falls short of expectations, warns a report by Fitch Ratings. Historically, fiscal outcomes in Bangladesh have deviated from budget forecasts due to underspending against targets. Revised figures for FY23 showed a budget deficit of 5.1% of GDP, lower than the initial target of 5.5%.

Bangladesh aims to attract Tk 4,23,406 crore in additional private investments to achieve its target of 27.83% investment to GDP in FY24. This is crucial for sustaining economic growth, creating jobs, and reducing poverty. The government has set ambitious goals to increase the private investment share in GDP to 27.83% and total investment share to 33.75% in the proposed budget.

Finance Minister AHM Mustafa Kamal has presented the budget for fiscal year 2023-2024, proposing a total allocation of Tk113,576 crore for social safety net programs. This accounts for 16.75% of the total budget and 2.55% of GDP. The Ministry of Finance aims to expand the social safety net by including an additional 7.35 lakh beneficiaries, providing support to the elderly, widows, and disabled individuals.

The upcoming 2023-24 fiscal year's Annual Development Programme (ADP) will incorporate 79 public-private partnership (PPP) projects, as announced by the government. These projects require a total investment of Tk 2,36,821 crore for successful implementation. The decision to include these projects in the ADP aims to facilitate their execution through PPP initiatives. Private individuals or organizations interested in undertaking new projects must go through the PPP Authority for processing.

The government is contemplating classifying tax exemptions as subsidies, a move that has drawn skepticism from economists and policy analysts. Sources at the National Board of Revenue reveal that the government's estimated direct tax expenditure in the upcoming fiscal year (FY24) could reach Tk1.78 lakh crore, while direct government subsidies might stand at Tk1.10 lakh crore. By categorizing tax exemptions as subsidies, the total subsidy amount would reach Tk2.90 lakh crore in the next fiscal year.