Performance analysis of Bangladesh Budget

2015-16 & 2016-17

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NAME ID & BATCH

Nasrin Sultana 2548/42c

Chandrima Majumder 2543/42c

Sujan Chandra Kor 2551/42c

S. M. Saifur Rahman 2552/42c

Bidhan Biswas Shawan 2563/42c

Budget 1A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or events in measurable terms.

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Government budgets are of two types

◇Balannced Budget◇Unbalanced Budget

Types of Budget

Balanced BudgetBalanced budget is a situation, in which estimated revenue of the government during the year is equal to its anticipated expenditure.

Government's estimated Revenue

= Government's proposed Expenditure.

The budget in which income & expenditure are not equal to each other is known as Unbalanced Budget.Unbalanced budget is of two types :-◇ Surplus Budget◇ Deficit Budget

Unbalanced Budget

Surplus BudgetThe budget is a surplus budget when the estimated revenues of the year are greater than anticipated expenditures.

Government expected revenue

> Government proposed Expenditure.

Government's estimated Revenue

<Government's

proposed Expenditure

Deficit BudgetDeficit budget is one where the

estimated government

expenditure is more than

expected revenue.

•Proposed Budget Structure for (FY 2016-17), (FY 2015-2016):Table 1: Proposed Budget Structure for (FY 2016-17), (FY 2015-2016)

(In crore)13

Sector Budget 2015-16 Budget 2016-17 Total Revenue 2,08,443 (12.1) 2,42,752 (12.4)

NBR Tax 1,76,370 2,03,152

Non-NBR Tax 5,874 7,250

Non Tax Receipt 26,199 32,350

Total Expenditure 2,95,100 (17.2) 3,40,605 (17.4)

a) Non Development Revenue

Expenditure

1,64,571 (9.6) 1,88,966 (5.6)

b) Development Expenditure 1,02,559 (6.0) 1,17,027 (6.0)

c) Other Expenditure 27,970 (1.6) 34,612 (1.8)

Budget Deficit (86,657) (5.0) (97,853)(5.0)

a) External 30,134 (1.8) 36,305 (1.8)

b) Domestic 56,523 (3.3) 61,548 (3.3)

Of which, Bank 38,523 (2.2) 38,523 (2.2)

·         Total Revenue

·         Total Expenditure

·         Budget Defici

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

12.10%

17.20%

5.00%

12.40%

17.40%

5.00%

Budget 2015-16Budget 2016-17

(In core Tk.)

Human Resource Development Budget 2016-17 Budget 2015-16

1. Ministry of Primary and Mass Education 7,710 (7.0) 5,542 (5.7)

2. Ministry of Health and Family Welfare 6,235 (5.6) 5,331 (5.5)

3. Ministry of Education 6,167 (5.6) 4,197 (4.3)

4. Others 7,091 (6.4) 6,238 (6.4)

Total 27,203 (24.6) 21,308 (22.0)

•Sectoral Allocation in Human Resource Development:

0.00%

2.00%

4.00%

6.00%

8.00% 7.00%5.60% 5.60%

6.40%5.70% 5.50%4.30%

6.40%

Budget 2016-17 Budget 2015-16

(In core Tk.)

Agriculture & Rural

Development

Budget 2016-17 Budget 2015-16

Local Government Division 18,548 (16.8) 16,650 (17.2)

Ministry of Water Resource 3,759 (3.4) 3,062 (3.2)

Ministry of Agriculture 1,841 (1.7) 1,824 (1.9)

Others 2946 (2.7) 2,985 (3.1)

Total 27,094 (24.5) 24,521 (25.3)

•Sectoral Allocation in Agriculture & Rural Development:

Local Govern-

ment Divi-sion

Ministry of Water

Resource

Ministry of Agriculture

Others0.00%2.00%4.00%6.00%8.00%

10.00%12.00%14.00%16.00%18.00%20.00%

16.80%

3.40%1.70%

2.70%

17.20%

3.20%1.90%

3.10%

Budget 2016-17 Budget 2015-16

(In core Tk.) Power and Energy Budget 2016-17 Budget 2015-16

Power Division 13,040 (11.8) 16,485 (17.2)

Energy and Mineral Resource 1,911 (1.7) 1,994 (2.1)

Total 14,951 (13.5) 18,479 (19.1)

•Sectoral Allocation in Power and Energy:

Power Division Energy and Mineral Resource 0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

11.80%

1.70%

17.20%

2.10%

Budget 2016-17 Budget 2015-16

(In core Tk.) Transport and Communication Budget 2016-17 Budget 2015-16

Ministry of Railways 9,115 (8.2) 5,650 (5.8)

Road Transport and Highways Division 8,161 (7.4) 5,675 (5.9)

Bridge Division 9,258 (8.4) 8,921 (9.2)

Others 2,020 (1.8) 1,413 (1.5)

Total 28,554 (25.8) 21,659 (22.3)

•Sectoral Allocation in Transport and Communication:

Ministry of Railways

Road Transport and Highways

Division

Bridge Division Others0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

8.20%7.40%

8.40%

1.80%

5.80% 5.90%

9.20%

1.50%

Budget 2016-17 Budget 2015-16

Summary of Findings:

◇ Interest payment for domestic debt has already risen substantially .Debt servicing for borrowing for large infrastructure projects may put further pressure in future

◇ The government takes many projects for educational sector like, giving computer, projector etc but there have no electricity then how could they able to use the computer

◇ Total Allocation for the power and energy sector in FY 17 isTk.15, 035 Core (9.5 % Lower than RB16, Mainly driven by lower allocation for development project).

◇ Nominal exchange rate remained stable but made gains against currencies of Bangladesh’s major competitors which led to some erosion of export competitiveness.

◇ The GDP growth in FY15 6.6%,in FY16 7.05% and the GDP growth target for FY17 has been set at 7.2%.

◇ Inflation is expected to decline to 5.8% in FY17 compared to FY15 (6.4%) and FY 16 (6.2%).

There are some suggestion to collect the resources accurately and improving the Budget decision.◇ Simplification of VAT registration◇ Maintain the current momentum of revenue mobilization◇ Emphasis on assesses-friendly institutional issues◇ Form a Task Force for accelerated disbursement of held-up project aid◇ Avoid volatility in bank borrowing to avoid pressure on private borrowing.◇ Enhanced public-private and government-NGO partnership.

RECOMMENDATION 

◇ Quality must be ensured while including new projects.◇ To gear up foreign aided projects◇ Focus on power sector◇ Public-private partnership to monitor progress in key areas.◇ Computerization of tax mobilization activities.◇ Generation of regular and periodic updates on key budget related

indicators.

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