Preparation of budget
Sunday, 11 May 2008

Mobilization of more revenue needed

Mismatch between the available resources and the expenditure needs has always leave the government hard put in preparing budget of developing country like Bangladesh. Again, the scopes for mobilizing revenue from indirect taxes are shrinking owing to external as well as domestic constraints. Yet the size of the national budget has been growing with every passing year because of the expansion of economic activities in the private sector and resources coming from those related areas as taxes and duties. However, borrowing from the country's banking system and the members of the public seems to be the easiest way of meeting the resource gap for the government. According to a report published lately, the payment of interests on foreign as well as domestic debt would constitute the single largest revenue expenditure of the budget for the next financial year. The amount-Tk 145 billion-- would be nearly double the amount the government paid in the fiscal 2005-06. A finance ministry official involved in the national budget making process, reportedly, said the size of the interest payment has become a matter of concern for the government. In reality, many experts, several years back, had pointed out that the indiscriminate borrowing from the banking system in particular would emerge not only as a major problem in case of resource management by the government but also for availability of resources to the private sector, which is considered to be the main engine of economic growth in a free market economy. The government has got itself caught up in a debt-trap and it might prove really difficult on its part to wriggle itself out of that. And it is more likely that the size of the interest payment would continue to rise and at one point might even surpass the amount borrowed by the government in a particular financial year. The budget for the next fiscal, according to reports in the media, having provisions for higher spending on social safety net programmes and subsidies, would be bigger by 10 to 13 per cent of that of the current fiscal. Buoyed by the level of revenue mobilized by the National Board of Revenue during the current financial year, the government most likely is going to set rather an ambitious revenue target for the next fiscal. The government should give up the propensity to exploit the handy sources of funding and try its best to mobilize more revenue.

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