Finance Minister Abul Hassan Mahmood Ali on Thursday announced a Tk 7,97,000 crore national budget for the upcoming financial year 2024-25.

During his speech in Parliament, in the presence of Prime Minister Sheikh Hasina, the finance minister highlighted the government’s decision to implement timely fiscal sector reforms, such as digital transformation, tax net expansion, and the collection of non-tax revenue, in light of the current global political landscape and the state of the domestic macro economy.

Mahmood Ali projected that under the ‘Smart Bangladesh’ initiative, the country’s per capita income would reach at least $12,500, with less than 3 percent of the population living below the poverty line, and the eradication of extreme poverty.

Despite global volatility and adverse conditions, Ali targeted a 6.75 percent GDP growth while containing inflation at 6.50 percent.

The proposed budget size of Taka 7,97,000 crore represents a 4.60 percent increase, or around Taka 35,215 crore, over the budget of the outgoing fiscal year (FY24).

The country’s GDP size is estimated at Taka 55,97,414 crore. The government has reduced its expenditure by Taka 47,367 crore in the revised budget for the outgoing fiscal year 2023-24, bringing it down to Taka 714,418 crore.

In the budget for FY24, total government expenditure was estimated at Taka 7,61,785 crore.

Given all these reforms and initiatives to augment revenue collection, a total of Taka 5,41,000 crore in revenue income has been estimated for FY25, which accounts for 9.7 percent of the GDP.

Of this amount, it is proposed to collect Taka 4,80,000 crore through the National Board of Revenue, and Taka 61,000 crore from other sources.

Excluding grants, the proposed budget includes an Annual Development Programme (ADP) outlay of Taka 2,65,000 crore and an estimated deficit of Taka 2,56,000 crore.

Apart from the original ADP allocation of Taka 2,65,000 crore, an additional Taka 5,943 crore has been allocated for schemes, Taka 7,627 crore for special projects outside the ADP, and Taka 2,884 crore for the food-for-work programme.

For the upcoming FY25, the budget size has been estimated at Taka 7,97,000 crore, which is 14.2 percent of the GDP. A total of Taka 5,32,000 crore is proposed to be allocated for other expenditures, including operating costs.

In the proposed budget, a total allocation of Taka 2,06,569 crore has been proposed for social infrastructure, constituting 25.92 percent of the total allocation.

For physical infrastructure, an allocation of Taka 2,16,111 crore has been proposed, which constitutes 27.12 percent of the total allocation.

For the common service sector, an allocation of Taka 1,68,701 crore has been proposed, comprising 21.17 percent of the total allocation.

It is noteworthy that since 2022, the interest rate has been gradually increased with the aim of controlling inflation in the western world.

In the proposed budget for FY25, the estimated deficit stands at Taka 2,56,000 crore, which is 4.6 percent of GDP.