The government would require total rate of investment to rise at 32.0 percent of GDP in FY 2013-14 if the ICOR remains constant at the level of the previous year (Table 03). On the other hand, if the investment rate remains constant to the level of FY 2012-13, the productivity of investment has to be enhanced to reduce ICOR to 3.72 to make this growth possible.
If the rate of investment observes an increment of 0.8 percent in FY 2013-14, and the ICOR returns to the level of 2011-12, the maximum growth possible in FY 2013-14 would be 6.49 percent. In view of the current condition of the economy, this is, however, not feasible. The inability to mobilise revenues at
a higher rate is affecting the ability of the government to fund critical sectors, particularly physical and socio-economic infrastructures, needed for economic development. The MMTF envisages five percent of the GDP as fiscal deficit.
The overall budget deficit for FY 2013-14 is estimated at Tk. 55,032 crore, which is 4.6 percent of GDP. The revised budget for FY 2012-13 has estimated a deficit of Tk. 49,656 crore (4.8 percent of GDP), which was Tk. 55,000 crore (5.0 percent of GDP) in the proposed budget. The three fiscal targets related to earning from revenue, expenditure of revenue and deficit in budget have fallen short in FY 2012-13 and the government had to revise these by a significant margin.
The targets for collection and expenditure of revenue in FY 2013-14 are set above the trend observed in the last several fiscal years. The National Board of Revenue (NBR) missed the target of revenue collection of Tk. 1,39,670 crore in FY 2012-13. Since the revenue target of the government seems to be ambitious, the government may be forced to cut the expenditure level in FY 2013-14 to keep the deficit of budget within the target. At the current rate of revenue realisation, gap between targeted and actualised revenue may increase by TK 8.18 billion. The target in the current budget is TK 1674.59 billion.
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