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Critically analyze the present budget of Bangladesh and its sectors impacts
Term Paper On
Submitted to
Submitted by
Serial No:
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01
091597
02
091633
03
Mamunur Rashid
07882747
04
091636
05
Sharjil Ahmed
091623
06
Protiva Talukder
091602
07
091590
08
091615
09
091613
10
091534
Contact
: epimetheus.jnu@gmail.com
January
, 2012
Sir,
We are the student of Department of Finance (3rd batch) of Jagannath University, Dhaka &
also from the group named Epimetheus. We are very much enthusiastic about our
presentation. We are really happy to have such a presentation of challenging and interesting
like this presentation & also thanks to you for making us worthy for corporate. Our topic is
Critically analyze the present budget of Bangladesh and its sectors impacts. We have
learned many things from this topic which will help us in future to conduct as a finance
official. There were some obstacles we have faced at the time of collecting data about our
topic. But we have overcome all the obstacles by the endeavor effort by each member of our
group and tried our best to give an overview of our topic.
We the group Epimetheus tried our best to make this term paper impeccable, interesting,
informative and enjoyable by the help of electronic and print media in association with our
honorable teacher, mentor, counselor, instructor and advocate Md. Omar Faruque. We are
really grateful to him. We had limitations at the time preparing presentation. So mistakes may
occur in our demonstration of our presentation. We hope that, you will exempt our mistakes.
Thanking in anticipation,
Yours Fidel,
Group-Epimetheus
BBA 3rd Batch
Department of Finance
Jagannath University,Dhaka.
First of all we would like to thank the Almighty for giving us the strength, and the aptitude to
complete this report within due time. We are deeply indebted to our course teacher, mentor,
and counselor, Md. Omar Faruque for assigning us such an interesting topic named
Critically analyze the present budget of Bangladesh and its sectors impacts. We also
express the depth of my appreciation to our honorable course teacher for his suggestion and
guidelines, which helped us in completing this term paper.
We are also grateful to the following person who has helped us a lot
Azizur Rahman
Personal Officer to Secretary
Bank & Financial Institutions Division
Ministry of Finance,
Government of the Peoples Republic of Bangladesh
Budget shows the government revenue & expenditure (Investment) project for a given fiscal
year (FY 11-12). It has 20 sectors including revenue & expenditure such as NBR-Tax, NonTax, Non-NBR Tax, Domestic Financing, Foreign Financing, Agriculture, Power & Energy,
Industrial & Economics, Public Administration, Education &IT, Interest, LGRD, Defense,
Transportation & Communication, Social Security, Health, Public order & Safety, Recreation
& Culture, Housing & Others. Every sectors & government sanction for these sectors are
based on experience current need, social needs & economical needs. Most of the case the
sanction is governments policy variable. Through budget we can know in which sector
government emphasis most that is the most important sector to the government. This is also
based on mathematical mechanism used by the economist & financial analyst. In budget its
shows that the amount of VAT collection has been projected at 343.04 billion taka which is
higher than the last fiscal year that indicates people are willing to pay VAT for development
of the country which represents a good trend of our economy. The amount of Non Tax
revenue has increased by 40.07% compared to FY 10-11 RE. The extra amount of non tax
revenue will help the government to reduce budget deficit and infrastructural development of
the country which may bring strong economy. The Non NBR tax revenue during the present
fiscal year projected to increase by 663 Crore taka which indicates that people are more
interested to contribute for well being of the country. In budget FY11-12 the government has
increased allocation in Agriculture, Industrial & Economic, Public administration, LGRD,
Defense sectors & decreased in Power & Energy, Education & IT, Interest, Transportation &
Communication, Social security, Health, Public order & Safety, Recreation & Culture,
Housing sectors rather than the previous year FY10-11 actual budget. But the above
allocation in some cases is higher than the reversed budget of FY10-11 RE. The current Govt.
is trying to meet up the maximum portion of budget deficit around 60% from its internal
sources that are from within the country. At the same time the Govt. has started taking huge
amount of loan from the banking sector which is too alarming situation for our economy to
control. A positive signal from the Govt. is that the rate of paying back loan amount has
increased which indicates that Govt. is trying to finance the budget deficit from the internal
source thats may reduce the countrys dependence on foreign loans. At the same time the
Govt. is getting more subsidies from foreign countries like World Banks climate fund which
is made by developed countries.
NAME
Page no
Executive Summary
Introduction
Chapter- 01
Introduction
01
01
02
02
02
02
Chapter- 02
Chapter-03
Budget
03
06
07
07
08
09
10
11-20
21
Conclusion
22
Bibliography
22
Chapter- 01
Introduction
A budget (from old French bougette, purse) is a financial plan and a list of all planned
expenses and revenues. It is a plan for saving, borrowing and spending. A budget is an
important concept in microeconomics, which uses a budget line to illustrate the trade-offs
between two or more goods.
The purpose of budgeting is to provide a forecast of revenues and expenditures, that is,
construct a model of how our business might perform financially if certain strategies, events
and plans are carried out & Enable the actual financial operation of the business to be
measured against the forecast. Fundamentally, the budget of a government is a summary or
plan of the intended revenues and expenditures of that government.
In this report we tried to show that how Government faces the challenges in the field of
budget & how they solve it with completeness & how important it is for the economy.
Secondary objective:
The case study has the following objectives:
To know about Budget.
To know the nature & practice of Budget.
Analyze the FY11-12 BD budget.
Impact of the budget in the economy
Scope
There were huge scopes to work in the area of this Report. Considering the dead line, and
exposure of the paper has been wide-ranging. The study Critically analyze the present
budget of Bangladesh and its sectors impacts has covered overall scenario of macro
economy of Bangladesh. It deals with the financial capability, proper investment & measures
these qualities. We got a chance to work on the one of the top most document of the
government which supplies the forecast information of a present or selected financial year.
By doing the assignment, we are able to know that the importance of budget for the
government to assess how the government of a country implement the economic planning. In
the report we have showed how the sectored impact of the budget.
Methodology
We have used the concept of the course, information of the report published by
Ministry of Finance.
Sources of Data
Here the secondary sources of information were used. The secondary sources are:
Books.
Website.
Limitations
While conducting the report on Critically analyze the present budget of Bangladesh and
its sectors impacts, some limitations were yet present there:
Because of time shortage many related area cant be focused in depth.
Website in different organization of Bangladesh contains poor information.
Recent data and information on different activities conducted by Ministry of Finance
are restricted.
Lack of latest studies of Ministry of Finance in different sector.
Chapter-2
Budget
A budget (from old French bougette, purse) is a financial plan and a list of all planned
expenses and revenues. It is a plan for saving, borrowing and spending.[1] A budget is an
important concept in microeconomics, which uses a budget line to illustrate the trade-offs
between two or more goods. In other terms, a budget is an organizational plan stated in
monetary terms.
In summary, the purpose of budgeting is to:
Provide a forecast of revenues and expenditures, that is, construct a model of how our
business might perform financially if certain strategies, events and plans are carried
out.
Enable the actual financial operation of the business to be measured against the
forecast.
A government budget is a legal document that is often passed by the legislature, and
approved by the chief executive-or president. For example, only certain types of revenue may
be
imposed
and
collected.
Property
tax is
frequently
the
basis
for municipal and county revenues, while sales tax and/or income tax are the basis for state
revenues, and income tax and corporate tax are the basis for national revenues.
The two basic elements of any budget are the revenues and expenses. In the case of the
government, revenues are derived primarily from taxes. Government expenses include
spending on current goods and services, which economists call government
consumption; government investment expenditures such as infrastructure investment or
research expenditure; and transfer payments like unemployment or retirement benefits.
Budget Summary
Budget No
41st
Budget Announcement
Budget Announcer
Budget Implementation
Honorable Minister
Ministry of Finance, Peoples Republic of Bangladesh
1st July, 2011
Total Budget
Tax Revenue
Foreign Grants
ADP
Total Expense
Financing
Foreign Debt
Internal Debt
Total GDP
Impact
Income tax revenue has reduced by 3.9% compared to last fiscal year which indicates that
income has become stable but the price of other utilities become higher compared to last year.
It indicates the higher rate of inflation. Government has projected higher Income tax revenue
by 65.56 billon taka which cannot be met up during the fiscal year that causes a great increase
of Budget deficit. The amount of VAT collection has been projected at 343.04 billion taka
which is higher than the last fiscal year that indicates people are willing to pay VAT for
development of the country which represents a good trend of our economy. Present budget
proposed 1.5% tax at source form all export proceeds which is zero percent during the last
fiscal year. It will reduce the gap between the import and export of the total amount of the
balance of payment. In a word, the total tax income has increased 21% over the FY 10-11
RE.
Impact
Taking loan from internal sources by the government has affect on total economy for
example our inflation has increased and day by day our economy is becoming vulnerable. So
government must take initiative to manage its loan for the betterment of our economy.
Chapter-03
Findings and conclusion
Finding of the Study
The intension of this study is to know about Critically analyze the present budget of
Bangladesh and its sectors impacts. The major findings of the overall study are discussed
below:
Analysis of the budget of FY11-12 compare to last fiscal year.
Segmentation of Income and Expense.
Impacts of different decision
Financial arithmetic of different sectors
Know about the amount of budget deficits & its financing sources.
Financing tendency of the government during this fiscal year.
Conclusion
Budget shows the government revenue & expenditure (Investment) project for a given fiscal
year (FY 11-12). It has 20 sectors including revenue & expenditure. Every sectors &
government sanction for these sectors are based on experience current need, social needs &
economical needs. Most of the case the sanction is governments policy variable. Through
budget we can know in which sector government emphasis most that is the most important
sector to the government. This is also based on mathematical mechanism used by the
economist & financial analyst. In budget its shows that people are willing to pay VAT for
development of the country which represents a good trend of our economy. The amount of
Non Tax revenue has increased that may bring strong economy. In budget FY11-12 the
government has increased allocation in Five (5) sectors & decreased in Nine (9) sectors rather
than the previous year FY10-11 actual budget. But the above allocation in some cases is
higher than the reversed budget of FY10-11 RE. The current Govt. is trying to meet up the
maximum portion of budget deficit around 60% from its internal sources that are from within
the country. Taking huge amount of loan from the banking sector is alarming situation for
economy. A positive signal is that the rate of paying back loan amount has increased.
Bibliography
Articles
Abul Maal Abdul Muhith; Budget Speech; FY 2011-12. (Ministry of Finance,
Government of the peoples republic of Bangladesh).
Web Sites
1. www.mof.gov.bd
2. www.en.wikipedia.org
3. www.nbr-bd.org