Prime Minister Sheikh Hasina yesterday directed the finance ministry to formulate a contractionary budget for the upcoming fiscal year to control inflation.

The measures include keeping the tax-exempt income threshold unchanged at Tk 3.5 lakh, a move that is expected to increase revenue receipts and bring more people under the tax net.

About 22 percent of the respondents placed top priority on decent jobs, 17.5 percent on quality education and 12 percent on social protection, said the associated report.

The government spent Tk 246,583 crore in July-January of 2023-24 out of the total budget of Tk 761,785 crore for the entire fiscal year, figures from the finance ministry showed. The outlay under interest payments and subsidies was Tk 88,226 crore, which was 36 percent of the allocation.

Last week, the finance division issued a circular asking all ministries and divisions to send by April 29 their budget proposals for 2024-2025 and their expenditure plans for the following two financial years to help prepare the midterm budgetary framework.

This will be the first meeting of the council since the new government took office after the January 7 parliamentary elections. Thus, it is the maiden meeting for the new finance minister on the budget and the overall macroeconomic situation.

The Centre for Policy Dialogue (CPD) has recommended the government restore macroeconomic stability, widen its fiscal space and ensure the best use of taxpayers’ money through appropriate prioritisation in the budget for the upcoming fiscal year.

Since the government’s annual development programme (ADP) is mostly reliant on loans, the private sector often finds it difficult to borrow from the banking system, according to the Centre for Policy Dialogue.

The Centre for Policy Dialogue (CPD) has recommended the government restore macroeconomic stability, widen fiscal space and ensure the best use of public resources through appropriate prioritisation in the upcoming budget for 2024-25

The failure to tame inflation not only imposes a steep tax on the poor and the middle class, it also erodes economic competitiveness.