The pattern of Income & Expenditure of the Government of

Bangladesh According to Budget 2016-2017

Submitted to
Dr. Mohammad Morshedur Rahman
Associate Professor, Dept. of Accounting
University of Chittagong

Submitted by
Nahida Islam BG-163072262
Syeda Nazma BG-163072259
Nijhum Roy BG-163072263
Sakia Kulsum Shah BG-163072261

CHITTAGONG UNIVERSITY CENTER FOR BUSINESS

ADMINISTRATION
FACULTY OF BUSINESS ADMINISTRATION, UNIVERSITY OF
CHITTAGONG

Date of the Submission: April 2, 2017

Table of content Page No.

 Cover 1
Table of Content 2
Introduction 3
Budget Typology 4
Budget FY2016-17at a Glance 5-6
Budget FY2016-17 Summary 7
Budget FY2016-17 Analysis 8-9
Revenue and Revenue Typology 10-11
Analysis of Revenue 12-14
Revenue by NBR & Non-NBR 15
Expenditure and Expenditure 16
Typology
Expenditure by Sector 17
Analysis of Expenditure 18-20
Deficit by Category 21
Analysis of Deficit 22
Finance Type 23
Finance Sources 23
Analysis of Finance 24
References 25-16
 1. Introduction
A budget (from old French bougette, purse) is a financial plan and a
list of all planned expenses and revenues. A government budget is a
legal document that is often passed by the legislature, and approved
by the chief executive-or president.
The two basic elements: Revenues and Expenses.
Revenues are derived primarily from taxes and non-tax revenue.
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, Social Safety nets.
1.1 Budget:
Budget is an estimate of costs, revenues, and resources over a
specified period, reflecting a reading of future financial conditions
and goals. The term Budget is commonly understood as a document
presented by a government containing an estimate of proposed
expenditure for a given period. Government budget is a schedule of
all revenues and expenditures that the government expects to receive
and plan to spend during the following year.
According to Prof. Rene Stourn, Budget is a preliminary approved
plan of public revenue and expenditure.
B.E Buck defines budget as a) Finance plan, b) A procedure
formulating, authorizing, executing and controlling this plan and c)
some government authority responsible for each successive step in
this procedure.
Government Budgets contain the strategies for mobilization,
allocation and disbursement of public money by means of fiscal and
monetary operations with due consideration of political, economic,
and bureaucratic decision - making process. Constitutionally,
Bangladesh uses the term 'Annual Financial Statement', which
shows the estimated receipts and expenditures of the government
for a particular financial year. In accordance with the
Constitutional provisions in the country, the budget is divided into
Consolidated Fund (CF) and Public Account (PA) of the
Republic.

1.2 Types of Budget:

Types of
Government
Budget

Balanced Unbalanced
Budget Budget

Surplus Deficit
Budget Budget

Based on the balancing of revenue and expenditure, budget is divided into two
types. These are-
a) Balanced budget:
Balanced budget is a Government budget where the current expenditure equals
current revenue. Most government budgets are unbalanced almost always on the
expense side, purportedly to spur growth and reduce unemployment by creating
demand with additional money supply.
In this budget which revenues are equal to expenditures? Thus, neither a budget
deficit nor a budget surplus exists. More generally, it refers to a budget that has
no budget deficit, but could possibly have a budget surplus.

b) Unbalanced budget:
The budget imbalance may be due to an excess of expenditure over income or
an excess of income over expenditure. Budget may either surplus or deficit. A
surplus budget means a budget when public revenue exceeds public outlay
(R>E). A deficit budget means a budget when public expenditure exceeds
revenue (R<E). This budget again divided into two section.
Surplus Budget: If the government collects more revenue than it
is spending, it is in surplus
Deficit Budget: If the Government spends more than it collects,
there is a deficit.
Again the government budget is divided into
a) Revenue budget
b) Capital budget
In Bangladesh, on the basis of expenditure budget is categorized as following-
1. Developmental Budget
2. Non Developmental budget

BUDGET AT A GLANCE (In crore Tk.)

Description Budget Revised Budget Actual
2016-17 2015-16 2015-16 2014-15
Revenue and Foreign Grants 2,42,752 1,77,400 2,08,443 1,45,966
Revenues (Statement I) 2,10,402 1,55,400 1,82,244 1,28,798
Tax Revenue 2,03,152 1,50,000 1,76,370 1,23,977
NBR Tax Revenue 7,250 5,400 5,874 4,821
Non-NBR Tax Revenue 32,350 22,000 26,199 17,167
Non-Tax Revenue 5,516 5,027 5,800 2,324
Foreign Grants/1 (Statement V)
Total : 2,48,268 1,82,427 2,14,243 1,48,290

Expenditure
Non-Development Expenditure 2,15,744 1,63,751 1,84,559 1,29,526
Non-Development Revenue Expenditure (Statement 1,88,966 1,50,379 1,64,571 1,18,994
III) 39,951 31,669 35,109 30,973
of which
Domestic Interest 38,240 30,044 33,396 29,436
Foreign Interest 1,711 1,625 1,713 1,537

Non-Development Capital Expenditure/2 (Statement 26,778 13,371 19,988 10,533

IV)
Net Outlay for Food Account Operation/3 - 594 201 227 2,131
(Statement VIII)
Loans & Advances (Net)/4 (Statement VIA) 8,428 4,705 7,755 9,047
Development Expenditure 1,17,027 95,908 1,02,559 63,676

Development Programmers Financed from Revenue 354 585 633 577

Budget/5(Statement IV)
Non-ADP Project (Statement VIA) 4,147 2,687 3,339 2,346
Annual Development Program/6 (Statement IX) 1,10,700 91,000 97,000 60,377
Non-ADP FFW and Transfer/7 (Statement X) 1,826 1,636 1,587 377
Total - Expenditure : 3,40,605 2,64,565 2,95,100 2,04,380
Overall Deficit (Including Grants) : - 92,337 - 82,138 - 80,857 - 56,090
(In percent of GDP) : -4.7 -4.7 -4.7 -3.7
Overall Deficit (Excluding Grants) : -97,853 -87,165 - 86,657 - 58,414
(In percent of GDP) : -5.0 -5.0 -5.0 -3.9
Financing
Foreign Borrowing-Net 30,789 19,963 24,335 4,909
Foreign Borrowing (Statement V) 38,947 27,047 32,239 11,990
Amortization (Statement IX) -8,158 -7,084 - 7,905 -7,082
Domestic Borrowing (Statement VIB) 61,548 62,175 56,523 51,169
Borrowing from Banking System (Net) 38,938 31,675 38,523 514
Long-Term Debt (Net) 28,910 21,118 24,182 11,898

Description Budget Revised Budget Actual

2016-17 2015-16 2015-16 2014-15
Short-Term Debt (Net) 10,028 10,557 14,341 11,384
Non-Bank Borrowing (Net) 22,610 30,500 18,000 50,656
National Savings Schemes (Net) 19,610 28,000 15,000 28,705
Others/8 (Statement VII) 3,000 2,500 3,000 21,950
Total - Financing : 92,337 82,138 80,857 56,077

Memorandum Item : 19,61,01 17,29,56 17,16,70 15,13,60

GDP 7 7 0 0

Budget of Bangladesh in 2015-2016 to 2016-17 Economic Years:

Developmental and Non-developmental Budget

Category Year 2015-16 Year 2014-15

Amount(in Percentag Amount(in Percentage
core) e core)
Developmental 1,02,559 38.39% 81,808 32.66%
Non 1,64,571 61.61% 168,699 67.34%
Developmental
Total 267,130 100% 250,506 100%
Table 3: Proposed Budget Structure for FY 2016-17(In crore Tk.)
Budget Revised Budget Actual
Sector
2016-17 2015-2016 2015-2016 2014-15
Total Tax Revenue 2,42,752 1,77,400 2,08,443 1,45,965
NBR Tax 2,03,152 1,50,000 1,76,370 1,23,977
Non-NBR Tax 7,250 5,400 5,874 4,821
Non Tax Receipt 32,350 22,000 26,199 17,167
Total Expenditure 3,40,605 2,64,565 2,95,100 2,04,376
Development 1,17,027 95,908 1,02,559 63,676
In which, Annual
1,10,700 91,000 97,000 60,376
Development Programme
Other Expenditure 34,612 18,278 27,970 21,708
Budget Deficit 97,853 87,165 86,657 58,411
Financing 97,853 87,165 86,657 58,411
External source 36,305 24,990 30,135 7,280
Domestic source 61,548 62,175 56,522 51,131
In which, 38,938 31,675 38,523 514
19,61,01 17,29,567 17,16,700 15,15,80
GDP
7 b a 2
1.3 Analysis:
In between 2014-15 and 2015-2016 economic year developmental budget is increased 5.73%,
on the other hand non development budget decreased 5.73% which indicate that government
has given more emphasis on development activity rather than non-development sector. The
budget for FY16 is BDT 3406.05 billion in size which is higher compared to that of the
FY16 revised budget and the largest of its history.
In the original budget of FY 2015-16, revenue target was set at Tk. 2,08,443 crore (12.1
percent of GDP).Taking the extent of revenue collection from July to March of the
current fiscal year into consideration, revenue collection target has been re-fixed at Tk.
1,77,400 crore (10.3 percent of GDP). In terms of NBR revenue, actual collection from
income and profit taxes and local level Value Added Tax has been less than satisfactory. On
the other hand, as for non-tax revenue, presumably BTRC revenue surplus and dividend
from Bangladesh Bank will be lower than expectation.