Budget highly ambitious, not implementable: economists
Published: 00:51, Jun 02,2017 | Updated: 01:55, Jun 02,2017
Economists on Thursday termed the proposed budget for 2017-18 fiscal highly ambitious and feared that the government would eventually fail to achieve the large revenue collection and implement the annual development target.
The proposed budget is not implementable at all and the government will have to revise major targets later in the next fiscal year, they observed.
They also criticised the government initiative for allocation of Tk 2,000 crore to recapitalise the scam-hit state-run banks as such initiative would spoil public money like previous years.
Finance adviser to a former interim government AB Mirza Azizul Islam told New Age that the government proposed the large size budget, which was highly ambitious, ahead of national election.
In the proposed budget, the government increased the target of revenue collection to Tk 2,48,190 crore from Tk 2,03,152 crore in FY17, which was very high in light of the current trend in revenue collection.
He said, ‘The government will not be able to bring any major change to revenue collection overnight considering its capacity’.
The government’s whole budgetary plan would face trouble as it might fail to achieve the expected revenue target, he feared.
The government has made a big jump in setting the proposed amount to implement its annual development programme as the size of the amount increased to Tk 1,53,331 crore from Tk 1,10,700 crore for the outgoing FY17, he noted.
The government set negative examples in the previous fiscal years as it could implement around 90 per cent of the revised ADP budget, he said.
The government should not keep any allocation to recapitalise the state-run banks in the proposed budget as the previous initiative did not bring any positive results, Mirza Aziz said.
He stressed not disbursing any loan on political ground with a view to strengthening the capital base of the state-run banks.
Former Bangladesh Bank governor Salehuddin Ahmed told New Age that it was highly difficult for the government to implement the proposed budget considering its mega size.
The size of proposed deficit financing was too much as it would exceed five per cent of the GDP, he said.
The government set a deficit financing of Tk 1,12,276 crore for FY18, up from Tk 97,853 crore for FY17.
‘Banks will face crisis if investment in the private sector gets momentum. Besides, the government may borrow a hefty amount from the banking system to implements its mega infrastructural projects’, he said.
The proposed budget was not implementable and the government would have to cut the major targets like revenue collection and expenditure target, he commented.
Policy Research Institute executive director Ahsan H Mansur told New Age that the government would not be able to manage the deficit financing in line with its proposed budgetary goals.
The government has aimed to borrow Tk 30,150 crore from national savings certificates and bonds and Tk 28,203 crore from the banking sources.
The government borrowing from the savings tools will cross Tk 70,000 crore from the savings tolls in FY18 due to higher returns on the tools compared to other rates prevailing in market, he said.
Finance minister AMA Muhith had not declared in his budgetary speech any cut in the returns on the savings tools which would increase its (government) interest liabilities, he predicted.
The bank borrowing by the government would maintain the same track meaning it would not require any lending from the banking system like this year due to the huge net sales in the savings tools, he said.
- See more at: http://www.newagebd.net/article/168...implementable-economists#sthash.bppbXc9d.dpuf
Published: 00:51, Jun 02,2017 | Updated: 01:55, Jun 02,2017
Economists on Thursday termed the proposed budget for 2017-18 fiscal highly ambitious and feared that the government would eventually fail to achieve the large revenue collection and implement the annual development target.
The proposed budget is not implementable at all and the government will have to revise major targets later in the next fiscal year, they observed.
They also criticised the government initiative for allocation of Tk 2,000 crore to recapitalise the scam-hit state-run banks as such initiative would spoil public money like previous years.
Finance adviser to a former interim government AB Mirza Azizul Islam told New Age that the government proposed the large size budget, which was highly ambitious, ahead of national election.
In the proposed budget, the government increased the target of revenue collection to Tk 2,48,190 crore from Tk 2,03,152 crore in FY17, which was very high in light of the current trend in revenue collection.
He said, ‘The government will not be able to bring any major change to revenue collection overnight considering its capacity’.
The government’s whole budgetary plan would face trouble as it might fail to achieve the expected revenue target, he feared.
The government has made a big jump in setting the proposed amount to implement its annual development programme as the size of the amount increased to Tk 1,53,331 crore from Tk 1,10,700 crore for the outgoing FY17, he noted.
The government set negative examples in the previous fiscal years as it could implement around 90 per cent of the revised ADP budget, he said.
The government should not keep any allocation to recapitalise the state-run banks in the proposed budget as the previous initiative did not bring any positive results, Mirza Aziz said.
He stressed not disbursing any loan on political ground with a view to strengthening the capital base of the state-run banks.
Former Bangladesh Bank governor Salehuddin Ahmed told New Age that it was highly difficult for the government to implement the proposed budget considering its mega size.
The size of proposed deficit financing was too much as it would exceed five per cent of the GDP, he said.
The government set a deficit financing of Tk 1,12,276 crore for FY18, up from Tk 97,853 crore for FY17.
‘Banks will face crisis if investment in the private sector gets momentum. Besides, the government may borrow a hefty amount from the banking system to implements its mega infrastructural projects’, he said.
The proposed budget was not implementable and the government would have to cut the major targets like revenue collection and expenditure target, he commented.
Policy Research Institute executive director Ahsan H Mansur told New Age that the government would not be able to manage the deficit financing in line with its proposed budgetary goals.
The government has aimed to borrow Tk 30,150 crore from national savings certificates and bonds and Tk 28,203 crore from the banking sources.
The government borrowing from the savings tools will cross Tk 70,000 crore from the savings tolls in FY18 due to higher returns on the tools compared to other rates prevailing in market, he said.
Finance minister AMA Muhith had not declared in his budgetary speech any cut in the returns on the savings tools which would increase its (government) interest liabilities, he predicted.
The bank borrowing by the government would maintain the same track meaning it would not require any lending from the banking system like this year due to the huge net sales in the savings tools, he said.
- See more at: http://www.newagebd.net/article/168...implementable-economists#sthash.bppbXc9d.dpuf
