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In general point of view a budget is a list of all planned expenses and revenues, saving and spending.

A budget is an important concept in the economy of any country. Budget basically done for forecasting of the revenues and expenditures that is construct a model of how expenses should be done and what are the basic strategies to be followed. It also helps to compare the actual financial performance with the expected performance. And government budget is a summary or plan of the intended revenues and expenditures of that particular government. Towards building a happy, prosperous and caring Bangladesh with this title finance minister Abul Maal Abdul Muhith presented on 9th June 2011 in Jatiay Sangsad a taka 1,63,589 corer national budget for the fiscal year 2011-12 . In this budget the expenditure basically has done depending on the revenues and financing capabilities. The total amount of budget is made for 1,63,589 corer where the revenue is calculated 1,23,323 cr thats why there would be a deficit of 45,204 cr (considering the GDP rate). Here major sources of revenues are considered; 16.6% revenue will be covered from internal financing, 56.2% of total revenue from National Board of Revenue (NBR) tax revenue, while 2.4% from non NBR tax revenue. Besides this, 13.8% will be collected from non tax revenues. And the deficit portion will be covered from foreign and domestic borrowing and 3.0% will also be covered from foreign donations. Lets overlook the revenue portion at a glance:
Description Budget 2011-12 Taka (corer) 1,18,385 Tax Revenue NBR Tax Revenue Non-NBR Tax Revenue Non-Tax Revenue Foreign Grants/1 95,785 91,870 3,915 22,600 4,938 Total 1,23,323 Revised 2010-11 Taka (corer) 95,187 79,052 75,600 3,452 16,135 4,224 99,411

Revenue and Foreign Grants


Revenues

Source: Bangladesh budget 2011-12 at a glance (internet)

From the above chart of revenues we can easily compare that this years budget is quite larger than the previous year. Because in last year the total sum of revenue was 99,411 cr taka, but in this year it is increased by 1,23,323 cr taka. Thats why the government had to increase the total tax portion also. Last year the total sum of tax revenue was revised 79,052 cr taka but in this year it counted as 95,785 cr taka. So it is increased by 16,733 cr taka. Besides this the government also make list for collecting more NBR (National Board of Revenue) tax than previous year also. Last year the total NBR tax was 75,600 cr taka but this year it is almost 92,000 cr taka. Non NBR tax is also increased by 463 cr taka this year. Government has also taken some changes in the regulation of tax: Government will never return back the income tax to the government employees. It is mandatory to submit the return of tax of the NGO firms. No tax on the share business but tax on the profit of foreign share transactions. There would be tax on the profit of foreigner for the transaction of shares in home. There is reduction of tax from 10% to 5% on savings paper & the wage earner bond, pension and family savings are included in tax. Individuals tax free income is enhance up to 1,80,000 taka where last year it was up to 1,65,000 taka. In case of women and old people (65+) the tax free income will be 2,00,000 taka instead of 1,80,000 taka. For the disabled persons this tax free income is 2,50,000 taka. There will be a 10% fertilizer charge on the asset of 2 corer or more. Tax over the source of share broker commission will be 0.10%. There is reduction of tax over the source income of savings paper from 10% to 5%. There are also few changes regarding the taxation policy. However the government had to consider the peoples income and the inflation rate of the country.

Lets see the basic expenditures of the government for this fiscal year (2011-12):

Expenditure
Non-Development Expenditure Non-Development Revenue Expenditure of which Domestic Interest Foreign Interest Non-Development Capital Expenditure/2 Net outlay for Food Account Operation Loans and Advances (Net)/3 Structural Adjustment Expenditure Development Expenditure Development Programmes Financed from Revenue Budget/4 Non-ADP Project Annual Development Programme Non-ADP FFW and Transfer/5

Taka (corer) 1,02,903 87,851

16,519 1,478 15,052 631 9,413 0 50,642 1,331 2,035 46,000 1,276

Total Expenditure 1,63,589 Overall Deficit (Including Grants) -40,266 (In Percent of GDP) -4.4 Overall Deficit (Excluding Grants) -45,204 (In percent of GDP) -5.0 Source: Bangladesh budget 2011-12 at a glance (internet)

As the expenditures is high enough than the total revenues, thats why it again become a deficit budget. Here most of part of expenditures will be occurred in the non development revenue expenditures. It will total sum
3

of taka 1,02,903 corer, where taka 50,642 corer will be expense for the development expenditure purpose. So the deficit potion of 45,204 corer taka will be financed from foreign and domestics borrowing including short run and long run debt. Besides this there will be a non bank borrowing with a taka 8251 corer. Lets see the total financing scenario for the deficit budget (2011-12):

Financing
Foreign Borrowing-Net Foreign Borrowing Amortization Domestic Borrowing Borrowing from Banking System Long-Term Debt (Net) Short-Term Debt (Net) Non-Bank Borrowing (Net) Others/6

Taka (corer) 13,058 18,685 -5,627 27,208 18,957 17,878 1,079 8,251 2,251 Total Financing: 40,266

Memorandum Item: GDP

8,99,670

Source: Bangladesh budget 2011-12 at a glance (internet)

Some noticeable things are happened in this budget. Major of these are: There might be an opportunity to make the black money white by investing in the government treasury. The portion for agriculture and education will be enhanced if there is any required. Government employee must also pay income tax on their income. However the budget is favored by most of the economists but the economists have suggested that the proper implementation of this budget is more important than development.