Political unrest to widen budget deficit As the main brunt of the ongoing blockade-hartal has to be borne by the shattered economy, the country’s budget deficit:Daily Sun

As the main brunt of the ongoing blockade-hartal has to be borne by the shattered economy, the country’s budget deficit is likely to increase in the next fiscal. According to sources, the total outlay of the national budget for the coming fiscal may be fixed at Tk 2.90 lakh crore. But the prospect for mobilisation of such huge amount is bleak. Consequently, the government will have to go either fo
r higher amount of loans or cut in development projects causing setback for GDP growth. In other words, the ongoing political unrest will increase budget deficit in the coming days. Meanwhile, according to the finance advisor of a former caretaker government Mirza Azizul Islam, under the prevailing political situation the GDP growth may stand at 5 to 5.5 percent during the current fiscal. In view of that the size of the next budget should not be beyond Tk 2.70 lakh crore.      According to sources, the government is worried over the budgetary expenses in the coming fiscal as huge amount of money will be required to execute the new pay scale of government employees in the new fiscal alongside the implementation of big infrastructure projects. In the coming days, the negative impact of political unrest will affect most the trade and commerce and investment clime. As a result, the finance ministry will have to go for increased amount of loans or cut in allocation to development projects. Either of the two will options increase the budget deficit unusually and GDP growth will slow down.   In the opinion of the National Board of Revenue (NBR), at the end of the current fiscal the deficit in government revenue earnings may fall short of the target by Tk 34,000 crore. Centre for Policy Dialogue(CPD) estimates that the revenue deficit may stand at Tk25,000 crore. However, Finance Minister AMA Muhith said revenue collection normally increases towards the end of the financial year. Yet, additional efforts are essential to prevent rise in the budget deficit, he added. NBR chairman Md Nazibur Rahman also expressed the hope that attaining the revenue collection target would be possible.  Former president of BGMEA Anwarul Alam Chowdhury Pervez said the impact of current political unrest will be evident more in upcoming days. Because, we are now exporting goods under the orders placed during the days of political stability. But 30 percent of the orders, which were coming since January for the next five-six months, have already declined. Some 99 percent of foreign buyers cancelled their tour of Bangladesh. So, even if a political compromise is reached now, at least one year will be required to recover the loss which has already been incurred.   (With inputs from Abul Kashem.)