Forecasters7Md. Faykuzzaman MiaLecturerAccounting & Information Systems BSMRSTU

BSMRSTU

Bangabandhu Sheikh Mujibur Rahman Science & Technology University, Gopalganj

Development Studies of BangladeshAIS 302

Financial Administration of Government of Bangladesh

The Ministry of Finance is a ministry of Bangladesh. The

ministry is responsible for state finance, including the

state budget, taxation and economic policy in

Bangladesh. It is led by the Finance Minister of

Bangladesh. The department must report to the

Parliament of Bangladesh. It contains four divisions:

-Finance Division

-Economic Relations Division

-Internal Resources Division

-Bank and Financial Institutions Division

-Finance Minister

-State Minister of Finance

-Senior Secretary

A budget is an estimation of the revenue and expenses over a specified future period of time and is compiled and re-evaluated on a periodic basis. A surplus budget means profits are anticipated, while a balanced budget means that revenues are expected to equal expenses. A deficit budget means expenses will exceed revenues.

Need For BudgetThe annual budget of a country is of paramount importance for carrying out its economic and administrative activities, developing international trade, strengthening external relations, bringing financial discipline preparing accurate statement of income and expenditure etc. The necessity of preparation of budget by the Government of Bangladesh is given below:

1) Budget is the annual statement of income and expenditure of the government.2) Budget is a document of guideline of economic activities of the country.3) It helps adopt financial planning for a particular period.4) It determines the area of all the activities of the government.5) It indicates the sources of revenue collection by the government.

Types of BudgetOn the basis of statement of income and expenditure, budget is two types.

Development budget: Development budget is that type of budget which is taken up for current and future capital formation. Broadly, development budget is launched for mobilizing country, creating source of direct income, developing energy and industry.

Revenue budget: Revenue budget includes financing of administrative machinery of the government, defense services, law and order, public health, education and other services.

Heads of Expenditure

Difficulties in the preparation of budget:

The difficulties of preparation of budget are as follows:1) The data which are collected from different offices, departments, organizations are not similar in nature.2) Wide difference exists between income and expenditure of the government.3) Revenue collection polices of the government are not effective.4) Priority selection of development is difficult.5) Excessive dependence of the economy on nature.6) Uncertainty of foreign aid, grant and loan.

Tax free income limit likely to be TK2.5 lakh in FY16.

Govt. to allocate only TK 2000cr for PPP projects next fiscal.

Food subsidy to get only 10% increase.

Cumulative increment suggested instead of time scale.

Bangladesh to beat poverty by 2021.Budget deficit likely to widen in next fiscal year.

74% more collection for power, energy sectors likely.

ICT to get TK1, 214cr in budget to implement vision 2021.

Budget to feature incentives to attract investment.

VAT free turnover limit may rise to TK30 lakh.Subsidy cut 10.34%

INCREASE OR DECREASE BUDGET 2015-16

Following is a resume of prospects of the national budget:

1) Measures have been taken to maintain rate of taxes reasonable and flexible.2) Attention has been given to protect the interest of the local industries in the case of indirect taxes.3) Though inadequate, the provision of financial allowances for the adults or old aged people, destitute, widow or divorce women, is a praiseworthy step.4) Tax exemption from the raw materials of the industrial goods will be helpful for boosting exports.5) As a result of widening the scope of VAT as well as its imposition on essential commodities, the government revenue will be increased.

Criticism of the Budget of Bangladesh

The budget could not provide measures required for gradually increasing the

success which started in different sectors.

A number of different service sectors have been brought of VAT as a result of

which the consumers will bear the burden of increased taxation.

To bring small and cottage industries under VAT, which were not include in the

earlier budget, may upset the people working in these industries.

The benefits of allocated funds in different sectors of the development program

will be very insignificant.

Ambitions revenue collection target 27 percent higher than the previous year

which will be challenging to achieve.

Weakness of the

Budget 2015-16

Thank You…..

References