The Unnayan Onneshan, an independent multidisciplinary think-tank, in its August issue of Bangladesh Economic Update divulges that the growth rate of per capita debt burden is increasing at a higher rate than that of per capita GDP growth, resulting in increased accumulation of debt. In FY 2012-13, the rate of growth in per capita GDP and the rate of growth in per capita debt burden stood at 11.6 percent and 13.7 per cent respectively from 28.2 per cent and 13.8 percent in FY 2011-12.
The research organisation notes that the per capita debt burden is increasing over the years. In FY 2012-13, per capita debt burden of Bangladesh stood at Tk. 3389.84 from Tk. 2982.19 in FY 2011-12.
‘The target for revenue collection in FY 2013-14 is set above the trend observed in the last several fiscal years and the NBR missed its target of revenue collection in FY 2012-13’, observes the organisation.
According to the think-tank, revenue collection target of Tk.167459 crore might not be achieved in FY 2013-14 which was Tk.139670 crore in the last fiscal year.
The growth rate of development and non-development expenditure has been heading towards opposite directions making higher deficit. While the growth rate of non-development expenditure has increased by 21.5 per cent in FY 2013-14 from 14.7 per cent in FY 2012-13, the rate of growth in development expenditure has decreased at 25.1 per cent in FY 2013-14 from 42.0 per cent in FY 2012-13.
Both social and physical infrastructure has received lower budgetary allocation in FY 2013-14. Similarly, budget allocation has decreased in agriculture and rural development sub-sectors, which is 2.35 percentage points lower in FY 2013-14 than that of the previous fiscal year.
Unnayan Onneshan notes that the agricultural sector has witnessed a negative rate of growth of 11.9 per cent in FY 2013-14. Like agriculture, total allocation for industry has decreased by 17.1 per cent in FY 2013-14 from 75.3 per cent in 2012-13. Moreover, the non-development expenditure dominates the agricultural allocation, which has less do to with future productivity.
The think-tank also records that in the national budget 2013-14, education and technology, health and family welfare have given lower allocation compared to previous year r. Expenditure on education and technology as well as health and family welfare are respectively 0.12 and 0.61 percentage points lower in FY 2013-14 than those of the last fiscal year.
Total expenditure on interest payment stood at Tk. 27743 crore in FY 2013-14, which is 18.83 per cent higher than that of FY 2012-13. As a result, the interest payment has turned out to be the top-receiving item of the non-development expenditure.
The leading organisation draws attention to five major problems that the energy and power sector has been facing regarding expenditure. First, high spending on energy and power has been affecting the government’s ability to invest in social and physical infrastructure. Second, the cost of subsidy in this sector is soaring as well. Third, the high spending on energy and power has still failed to lower the gap between the demand and production of electricity. Fourth, electricity price is rising despite the increase of subsidy. Fifth, most of the subsidy is provided for the production of electricity in rental, quick rental and independent power producer plants.
‘The size of government expenditure and the size of budget deficit may not necessarily be a matter of concern if deficit has led to augment growth’, adds the Unnayan Onneshan.