The government鈥檚 projected borrowing is set to exceed the planned provisional annual development programme size of Tk 2.65 lakh crore for the upcoming financial year, officials said.
Economists said that such an arrangement in the annual budget implied that the government would have to fund the development budget entirely with money borrowed from local and foreign sources.
The low revenue income will not enable the government to provide any funds from its revenue for the implementation of the ADP in FY25.聽
The officials of the finance ministry said that the projected deficit in the upcoming FY25 budget would be around Tk 2.75 lakh crore, at least Tk 10,000 crore higher than the proposed ADP.
This indicates that revenue incomes become exhausted mostly for running public administration, clearing interest payments, and public safety under the operating budget, economists said.
In outgoing FY24 and also in FY23, the government provided some Tk 6,000 crore and Tk 3,000 crore, respectively, for ADP from its own revenue.
It failed to provide any fund from revenue to the ADP from FY20 to FY22.
The gap between ADP and deficit financing was a whopping Tk 21,000 crore in FY21.
鈥楾he trend is not good,鈥� said Centre for Policy Dialogue distinguished fellow Mustafizur Rahman. 鈥業t indicates an increasing interest payment liability,鈥� he added.
In the outgoing FY24, interest payments accounted for 19.5 per cent of the operating budget, compared to 18.3 per cent in FY20.
Planning commission officials said that a meeting of the National Economic Council, chaired by Prime Minister Sheikh Hasina, would be held today to review the new ADP proposals made by the commission.
Some Tk 1.56 lakh crore will be funded from local sources, and the rest Tk 1.0 lakh crore from foreign sources.
The new propped ADP is just Tk 2,000 crore higher than the original ADP in the outgoing FY24, said officials.
They said that the transport sector had been projected to get the highest sectoral allocation of Tk 70,685 crore, accounting for 27 per cent of the new ADP size.
Power and energy is likely to get the second-highest allocation of Tk 40,751 crore, or 15 per cent of the new ADP.
Education and health sectors are likely to be given 12 per cent and 8 per cent allocations, respectively, in the new ADP, said officials.
Mustafizur Rahman said that allocations to health and education should be increased for the country鈥檚 socio-economic progress.
But the government has failed to do so because of low revenue income, one of the lowest in the world, he said.
Tax leakages, a lack of automation, and reform have been blamed for low revenue mobilisation by the National Board of Revenue, which is responsible for collecting the government鈥檚 85 per cent annual income.
The NBR鈥檚 dependence on indirect tax was blamed by economists for widening inequality to 0.499 in 2022 from 0.45 in 2010 as per the Gini coefficient.
Former World Bank Dhaka office chief economist Zahid Hussain said that NBR income from direct taxes would increase if tax leakage could be checked.
