2024-04-08 13:31:51
In the six months from July to December of the current fiscal year 2023-2024, only 25.88 percent of the total allocation has been implemented. In this, the progress in implementing the revenue budget has been 31.8 percent. And the implementation of the development budget has been 15.7 percent. This is due to the fact that the collection of budget revenue is much lower than the target. This information is known from the report on the six-month budget implementation progress of the Ministry of Finance.
According to the report, the budget revenue and expenditure targets for the 2024 fiscal year were increased at the beginning due to the large deficit in the implementation of the annual targets in the previous fiscal year. In fiscal year 2023, less than 90 percent of the original budget was actually spent at the end of the year.
Total actual operating expenses in the six months to December 2023 were 31.8 percent of the fiscal year 2024 revenue budget. By December 2023, expenditure on interest payments, education, entertainment, culture and religious affairs, public order and safety and agriculture remained relatively high. On the other hand, operating expenses of sectors like housing and general public services were relatively low.
The FY 2024 budget increased spending on the administration sector and reduced allocations for all other departments compared to FY 2023 actual spending. Among all segments in the period up to December 2023, the expenditure on interest payments was the highest and the share of this sector also increased in terms of actual expenditure on interest payments. During this period, the largest share of operating expenditure went to interest payments at 33 percent, general public services at 16 percent, education at 15 percent, defense at 8 percent, public order and safety at 7 percent, and agriculture and SSW (both) at 6 percent. Besides the broad sector-wise and ministry-wise classification, administrative expenditure is also broken down into economic groups. These categories include, salaries and allowances, goods and services, domestic and foreign interest payments, subsidies and current transfers, block allocations, acquisition of assets and works, investment in shares and equity, foreign financial assets and programs financed from the operating budget.
As of December 2023, the total operating expenditure is 31.8 percent of the total budget. Interest payments are 53 percent and salary and allowances are 38 percent. Expenditure rates in certain categories exceed overall consumption rates.
The actual development expenditure during the 6 months under consideration was 15.73 percent of the total development budget of the fiscal year. At this time, the total budget expenditure including revenue and development expenditure is 1 lakh 94 thousand 887 crores, which is 25.88 percent of the total budget allocation in both sectors in the same financial year.
The total allocation of development expenditure to various Ministries/Departments is categorized under 13 broad sectors. Actual expenditure in the first half of the fiscal year up to December 2023 is 15.73 percent of the total development budget. The actual expenditure during the same period of the previous financial year was about 14.18 percent of the revised budget. It was more when compared to the original budget.
Compared to the total development budget allocated during this period, recreation, culture and religious affairs accounted for 39.58 percent, public order and security 24.82 percent, agriculture, fisheries and livestock, land, water resources and food 24.32 percent, housing 22.99 percent, LGRD. 22.45 percent and 20.92 percent was spent on industry, jute, textiles, commerce, labor and foreign sectors. Major sectors such as general public services, health, and transport and communications have spent less than the average allocation.
Social infrastructure accounted for the largest share of total development expenditure till December 2023 at 44.6 per cent followed by physical infrastructure at 34.4 per cent.
37.3 percent revenue collection of the entire year’s collection target is possible in the 6 months of the financial year till December 2023. 84.9 percent of the revenue collected during this period came from the National Board of Revenue (NBR) tax sector. NBR’s annual target of total tax collection stands at 36.8 percent.
A revenue collection target of Tk 4 lakh 75 thousand 281 crore has been fixed for the financial year 2023-2024. This target is 14.72 percent higher than the revised budget estimate for FY 2022-2023 and 15.53 percent higher than the original budget.
Total revenue collection in FY2023 was 8.16 percent of GDP and 84.7 percent of the revised budget target. On the other hand, the total revenue collection in the six months of the current financial year till December 2023 has increased by 13.9 per cent compared to the same period of the previous financial year and the achievement is 37.3 per cent compared to the annual target.
Total revenue is estimated to be 10 percent of GDP in FY2024. This is about 15.5 percent higher than the previous year’s revised budget estimate and 36.4 percent higher than the actual revenue collected in fiscal year 2023.
A major share of the government’s revenue comes from NBR sources (84.9 percent as of December 2023). The growth rate of NBR and non-NBR tax revenue stood at 11.7 percent and negative 2.9 percent respectively in the six months under consideration. Meanwhile, non-tax revenue collection increased by 34.6 percent compared to the same period of the previous fiscal year.
Annual target achievement in tax and non-tax revenue sector in 6 months was 36.0 and 48.6 percent respectively. Actual tax revenue collection in FY2023 was 7.3 percent of GDP. And the tax revenue collection target for FY 2024 is 9 percent of GDP. This is 15.98 percent higher than the revised budget for FY2023 and 37.3 percent higher than the actual collection for the same period.
In the first half of the current fiscal year 2023-2024 up to December 2023, a significant portion of NBR’s tax revenue came from indirect taxes. Of the total tax collected by NBR, 40.68 percent came from VAT, 31.87 percent from income tax, 14.21 percent from supplementary duty, 11.93 percent from import duty, and the rest from other sources.
The overall balance (excluding grants) stood at 0.17 percent of GDP by December 2024, a negative figure. The actual budget deficit (excluding grants) as a percentage of GDP in FY2023 was 4.61 percent. Including grants it was 4.55 percent of GDP.
On the other hand, the budget deficit (excluding grants) for FY 2024 is estimated at 5.23 percent of GDP. The deficit including grants is expected to be 5.15 percent of GDP.