Based on the information provided in the "Budget at a Glance" for Bangladesh's

FY2024-25 budget:
Revenue and Foreign Grants
The total revenue and foreign grants for FY2024-25 are projected at Tk
5,45,400 crore, which is a significant increase from the revised budget of
FY2023-24 (Tk 5,03,900 crore) and the actual revenue of FY2022-23 (Tk
3,69,410 crore). The majority of the revenue is expected to come from tax
revenue, particularly NBR tax revenue (88.7% of the total revenue). However,
the projected growth in revenue, especially in non-NBR tax revenue and foreign
grants, seems ambitious and may be challenging to achieve.
Expenditure
The total expenditure for FY2024-25 is estimated at Tk 7,97,000 crore, a
substantial increase from the previous years. Operating expenditure, which
includes recurrent expenditure and capital expenditure, constitutes a significant
portion of the total expenditure. The high allocation for interest payments (Tk
1,12,655 crore) is a concern, as it limits the government's fiscal space for
development spending.
The development expenditure, including the Annual Development Programme
(ADP), is set at Tk 2,81,453 crore. There's a significant increase in both
operating and development expenditures compared to the previous year's
revised budget. This indicates an expansionary fiscal policy, possibly aimed at
boosting economic growth. The Annual Development Programme (ADP)
allocation of 2,65,000 crore taka (about 34.8% of total expenditure) suggests a
strong focus on development projects.

Deficit and Financing

The overall deficit (excluding grants) for FY2024-25 is projected at Tk 2,56,000
crore, which is 5.2% of the GDP. This high deficit is a cause for concern, as it
may lead to increased borrowing and debt servicing costs in the future.
The deficit is planned to be financed through foreign borrowing (Tk 90,700
crore) and domestic borrowing (Tk 1,60,900 crore). The reliance on domestic
borrowing, particularly from the banking system, may crowd out private sector
investment and put pressure on interest rates.
Analysis
Bangladesh's FY2024-25 budget shows an expansionary fiscal stance with high
expenditure and a significant deficit. While the increased allocations for
development expenditure are welcome, the ambitious revenue targets, growing
interest payments, and high dependence on domestic borrowing are concerns
that need to be addressed. The government should focus on enhancing revenue
mobilization, prioritizing productive investments, and maintaining fiscal
discipline to ensure sustainable economic growth and development.

Revenue and Grants:

The total revenue and foreign grants for FY 2024-25 are projected to be
5,45,400 crore taka. This consists of:
Revenue: 5,41,000 crore taka
Tax Revenue: 4,95,000 crore taka (91.5% of total revenue)
NBR Tax Revenue: 4,80,000 crore taka
Non-NBR Tax Revenue: 15,000 crore taka
Non-Tax Revenue: 46,000 crore taka (8.5% of total revenue)
Foreign Grants: 4,400 crore taka

Expenditure:
The total expenditure for FY 2024-25 is budgeted at 7,61,785 crore taka. This
includes:

Operating Expenditure: 5,06,971 crore taka

Recurrent Expenditure: 4,68,983 crore taka
Capital Expenditure: 37,989 crore taka
Development Expenditure: 2,81,453 crore taka
Annual Development Programme (ADP): 2,65,000 crore taka
Budget Deficit:
The overall budget deficit (including grants) is projected to be 2,57,885 crore
taka.
This deficit represents 5.2% of the projected GDP.

Financing the Deficit:

The deficit will be financed through:
Foreign Borrowing (Net): 90,700 crore taka
Domestic Borrowing: 1,60,900 crore taka

Borrowing from Banking System: 1,37,500 crore taka

Non-Bank Borrowing: 23,400 crore taka

GDP Projection:
The projected GDP for FY 2024-25 is 50,06,782 crore taka.

Analysis:

Revenue Mobilization:
The government is heavily relying on tax revenue, particularly NBR tax
revenue, which accounts for about 88.7% of the total revenue. This suggests a
need for strong tax collection efforts and possibly expanded tax base.
Expenditure Growth:
Deficit and Financing:
The budget deficit at 5.2% of GDP is relatively high. The government plans to
finance this primarily through domestic borrowing (62.4% of financing), which
could potentially crowd out private sector borrowing and impact inflation.
Debt Servicing:
Interest payments are budgeted at 1,12,655 crore taka, which is about 22.2% of
the revenue. This high debt servicing cost could limit fiscal flexibility.
Foreign Grants and Borrowing:
The reliance on foreign grants is minimal, but net foreign borrowing plays a
significant role in deficit financing, indicating continued dependence on
external financial support.
Banking Sector Pressure:
The heavy reliance on borrowing from the banking system (1,37,500 crore taka)
may put pressure on the banking sector and potentially affect monetary policy
implementation.
Economic Growth Assumption:
The budget seems to be based on an optimistic economic growth projection,
given the increase in the estimated GDP from the previous year.

In conclusion, the FY 2024-25 budget of Bangladesh appears to be

expansionary, with a strong focus on development expenditure. However, the
high deficit and significant borrowing requirements, particularly from domestic
sources, may pose challenges in terms of macroeconomic stability and debt
sustainability. The government will need to ensure robust revenue collection and
efficient implementation of development projects to achieve the budgeted
targets.