2024-02-12 07:50:04
Government expenditure in Bangladesh is very low compared to many countries in the world, especially in South and Southeast Asia. In 2021, while Bangladesh’s government expenditure was 13 percent of GDP, India’s was 28.8 percent, Malaysia’s 22.3 percent and Vietnam’s 20.4 percent.
Besides, government expenditure in advanced economies is much higher than in Bangladesh. In this situation, Bangladesh is planning to increase the government expenditure to 15 percent. And for this it is considered that there is no alternative to increase revenue or income.
It is known that in the medium term, government expenditure is planned to be over 15 percent of GDP in the future. In this regard, the Finance Department has said that the government has set a target to increase expenditure as a percentage of GDP. For example, government expenditure was 13 percent of GDP in FY 2021-2021, which increased to 14.9 percent in FY 2021-2022 (in the revised budget).
It has been claimed that it has been possible only because of the successful implementation of the government financial management reform program.
According to sources, government expenditure (budget) as a percentage of GDP has decreased by 2 percent in 2022-2023 fiscal year compared to last year 2021-2022. According to the Ministry of Finance, government expenditure in Bangladesh as a percentage of GDP (Gross Domestic Product) is currently lower than some developing and emerging economies.
According to a report of the Ministry of Finance, the Government’s Vision Plan 2041 and the 8th Five Year Plan have emphasized on increasing government expenditure as a percentage of GDP at a significant rate and increasing expenditure on basic social and economic service sectors with the aim of ensuring quality and quality government services. However, increasing the size of public expenditure using limited resources and controlling inflation at the same time is a major challenge for the government.
An official of the finance department said, if our budget had been prepared according to the 8th Five Year Plan, the size of the budget in the current financial year would have been more than eight lakh crore rupees. But it was not possible to do that. One of the reasons is lack of resources. On the one hand domestic resources are not being extracted as expected, on the other hand foreign aid is not coming in at the desired rate. In particular, the country’s business had come to a standstill due to two years of Covid-19. This resulted in a kind of stagnation in revenue collection. As a result, it was not possible for the government to increase the expenditure due to the poor income.
The fact that the government’s income is not growing as expected is evidenced by the fact that NBR’s contribution as a percentage of GDP has been fluctuating between 7.5 and 9 percent over the years. For example, the share of NBR as a percentage of GDP in FY 2020-2021 was 7.5%. It was estimated at 9.5 percent in FY2021-2022. But later it was revised down to 8.3 percent. In the current fiscal year 2022-2023, this rate has been estimated at 8.3 percent, in the next fiscal year 2023-2024, 8.8 percent and in the fiscal year 2024-2025, it is estimated to be 9 percent. However, whatever the estimate, it will be difficult to achieve this rate under the existing conditions.
According to data from the Department of Finance and the IMF, government spending as a percentage of GDP in 2021 was above 20% in several countries. Among them, 57 percent of France, 49.4 percent of Sweden, 41.7 percent of United Kingdom, 39 percent of Australia, 36.8 percent of United States, 33.7 percent of China, 28.8 percent of India, 22.3 percent of Malaysia and 20 percent of Vietnam 4 percent. As such, it is very less in Bangladesh. In this situation, various initiatives are going to be taken to increase the revenue income.