The government wants to paint a rosy picture of the country’s economy in next fiscal budget with a range of positive assumptions.
Experts, however, said those positive assumptions are absurd and not reliable while making a big projection like national budget.
An official of finance division, who is involved with the budget process, said next budget titled ‘Economic transition and future path trajectory’ based on major assumptions that worldwide deadly coronavirus pandemic may wane in the beginning of next year.
An international and local economy may be normal resulting there is not any big impact on country GDP growth, inflation, and budget deficit next fiscal year budget, official further said adding that if our assumptions are wrong, the government will go for revision of the budget.
The official also said the global financial monitoring agency the International Monetary Fund (IMF) projected the growth rate will be 1.5 to 2.00 percent this fiscal but in next fiscal it will hit 9.5%.
Major focus on the budget now how to fight against coronavirus situation in the country and funding mega projects simultaneously, said the official.
Projected growth rate is likely to hit 8.2 percent in next 2020-21 fiscal year while 5.2 percent in the outgoing fiscal.
Economist and financial adviser to past caretaker government Dr AB Mirza Azizul Islam said, “There is unprecedented negative impact on the global economy for the deadly virus.”
Bangladesh is not out of the wave of international health crisis, he said adding that it is totally an absurd assumption that there will be no impact on growth of the country.
Center for Policy Dialogue (CPD) has said achieving the tax collection target set by the NBR for fiscal year 2020-21 is impossible, the analyst said labelling the goal unrealistic.
They made the observation while speaking at a virtual news conference on "Challenges of Policymaking in Times of Pandemics," organised by the CPD, a think tank.
They said the tax authorities set this unrealistic target to hide mismatch in income and expenditure in the budget.
" … the practice here is that the government sets the target for expenditure first, then sets the source of financing," said distinguished fellow of the CPD Prof Mustafizur Rahman.
Prof Rahman said the government has set 56 per cent higher revenue target for next fiscal year when pandemic continues if GDP is 8.0 per cent, inflation is 5.4 per cent then 14 per cent is a natural growth of revenue.
“Then if you put lots of efforts, it may go up to 20 to 21 per cent, but revenue target for such a year has been set at 56 per cent,” he wondered.
The government has set revenue collection target at Tk 3.30,000 crore for the NBR for fiscal year 2021.
The target is 1.35 per cent higher than that of the original goal of Tk 3,25,000 and almost 10 per cent.
The World Bank said the global economy will contract the most since World War II this year and emerging nations’ output will shrink for the first time to the lowest in six decades due to the Covid-19 pandemic, reducing incomes and sending millions of people into poverty.
Global GDP will probably shrink by 5.2% in 2020, the WB said in its semi-annual Global Economic Prospects report published two days ago. Emerging and developing economies will shrink by 2.5%, their worst performance in data that starts in 1960, it said.
WB predicts that Bangladesh's growth will slow to 1.6 percent in the outgoing fiscal.
