Analysis of Budget 2011-12
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Transcript of Analysis of Budget 2011-12
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7/31/2019 Analysis of Budget 2011-12
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Analysis of budget 2011-2012
Md. Abdul Ali
Student ID: 1279Dept. of Finance and Banking
BBA Program1st Batch
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In general point of view a budget is a list of all planned expenses and
revenues, saving and spending. A budget is an important concept in the
economy of any country. Budget basically done for forecasting of the
revenues and expenditures that is construct a model of how expenses
should be done and what are the basic strategies to be followed. It alsohelps to compare the actual financial performance with the expected
performance. And government budget is a summary or plan of the
intended revenues and expenditures of that particular government.
Towards building a happy, prosperous and caring Bangladesh with this
title finance minister Abul Maal Abdul Muhith presented on 9th June 2011
in Jatiay Sangsad a taka 1,63,589 corer national budget for the fiscal year
2011-12 .
In this budget the expenditure basically has done depending on the
revenues and financing capabilities. The total amount of budget is made
for 1,63,589 corer where the revenue is calculated 1,23,323 cr thats why
there would be a deficit of 45,204 cr (considering the GDP rate). Here
major sources of revenues are considered; 16.6% revenue will be covered
from internal financing, 56.2% of total revenue from National Board of
Revenue (NBR) tax revenue, while 2.4% from non NBR tax revenue.
Besides this, 13.8% will be collected from non tax revenues. And the
deficit portion will be covered from foreign and domestic borrowing and
3.0% will also be covered from foreign donations.
Lets overlook the revenue portion at a glance:
Description Budget 2011-12 Revised 2010-11
Revenue and Foreign Grants Taka (corer) Taka (corer)
Revenues 1,18,385 95,187
Tax Revenue 95,785 79,052
NBR Tax Revenue 91,870 75,600
Non-NBR Tax Revenue 3,915 3,452
Non-Tax Revenue 22,600 16,135
Foreign Grants/1 4,938 4,224
Total 1,23,323 99,411
Source: Bangladesh budget 2011-12 at a glance (internet)
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From the above chart of revenues we can easily compare that this years
budget is quite larger than the previous year. Because in last year the total
sum of revenue was 99,411 cr taka, but in this year it is increased by
1,23,323 cr taka. Thats why the government had to increase the total tax
portion also.Last year the total sum of tax revenue was revised 79,052 cr taka but in
this year it counted as 95,785 cr taka. So it is increased by 16,733 cr taka.
Besides this the government also make list for collecting more NBR
(National Board of Revenue) tax than previous year also. Last year the
total NBR tax was 75,600 cr taka but this year it is almost 92,000 cr taka.
Non NBR tax is also increased by 463 cr taka this year.
Government has also taken some changes in the regulation of tax:
Government will never return back the income tax to the
government employees.
It is mandatory to submit the return of tax of the NGO firms.
No tax on the share business but tax on the profit of foreign share
transactions.
There would be tax on the profit of foreigner for the transaction of
shares in home.
There is reduction of tax from 10% to 5% on savings paper & the
wage earner bond, pension and family savings are included in tax. Individuals tax free income is enhance up to 1,80,000 taka where
last year it was up to 1,65,000 taka.
In case of women and old people (65+) the tax free income will be
2,00,000 taka instead of 1,80,000 taka.
For the disabled persons this tax free income is 2,50,000 taka.
There will be a 10% fertilizer charge on the asset of 2 corer or
more.
Tax over the source of share broker commission will be 0.10%.
There is reduction of tax over the source income of savings paperfrom 10% to 5%.
There are also few changes regarding the taxation policy. However the
government had to consider the peoples income and the inflation rate of
the country.
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Lets see the basic expenditures of the government for this fiscal year
(2011-12):
Expenditure Taka (corer)
Non-Development Expenditure 1,02,903
Non-Development Revenue Expenditure 87,851
of which
Domestic Interest 16,519
Foreign Interest 1,478
Non-Development Capital Expenditure/2 15,052
Net outlay for Food Account Operation 631
Loans and Advances (Net)/3 9,413
Structural Adjustment Expenditure 0
Development Expenditure 50,642
Development Programmes Financed from Revenue Budget/4 1,331
Non-ADP Project 2,035
Annual Development Programme 46,000
Non-ADP FFW and Transfer/5 1,276
Total Expenditure 1,63,589
Overall Deficit (Including Grants) -40,266
(In Percent of GDP) -4.4
Overall Deficit (Excluding Grants) -45,204
(In percent of GDP) -5.0
Source: Bangladesh budget 2011-12 at a glance (internet)
As the expenditures is high enough than the total revenues, thats why it
again become a deficit budget. Here most of part of expenditures will beoccurred in the non development revenue expenditures. It will total sum
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of taka 1,02,903 corer, where taka 50,642 corer will be expense for the
development expenditure purpose. So the deficit potion of 45,204 corer
taka will be financed from foreign and domestics borrowing including
short run and long run debt. Besides this there will be a non bank
borrowing with a taka 8251 corer.
Lets see the total financing scenario for the deficit budget (2011-12):
Financing Taka (corer)
Foreign Borrowing-Net 13,058
Foreign Borrowing 18,685
Amortization -5,627
Domestic Borrowing 27,208
Borrowing from Banking System 18,957
Long-Term Debt (Net) 17,878
Short-Term Debt (Net) 1,079
Non-Bank Borrowing (Net) 8,251
Others/6 2,251
Total Financing: 40,266
Memorandum Item: GDP 8,99,670
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Source: Bangladesh budget 2011-12 at a glance (internet)
Some noticeable things are happened in this budget. Major of these are:
There might be an opportunity to make the black money white by
investing in the government treasury.
The portion for agriculture and education will be enhanced if there
is any required.
Government employee must also pay income tax on their income.
However the budget is favored by most of the economists but the
economists have suggested that the proper implementation of this budget
is more important than development.
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