Financing the proposed budget for 2015-16 will be the biggest challenge, Centre for Policy Dialogue (CPD) yesterday said, raising doubts about achieving the revenue collection targets to implement the Tk 2.95 lakh crore outlay.

"We are not concerned about the size of the budget. Our concern is rather about the financing of the budget and the financing mix to implement it," said CPD Distinguished Fellow Debapriya Bhattacharya at a press briefing at Brac Centre in the capital.

The civil society think-tank shared its analyses a day after Finance Minister AMA Muhith unveiled the national budget for 2015-16 fiscal setting a target of collecting Tk 2.08 lakh crore in total revenue, which is 27.6 percent higher than the revised collection goal for the outgoing fiscal year.

Debapriya made the presentation on behalf of the CPD.

The National Board of Revenue (NBR) will have to generate 84 percent of the total targeted revenue in the form of VAT, income tax, customs and supplementary duty.

The CPD said there is no doubt that investment has to be increased to accelerate the pace of the economy and revenue collection as percentage of GDP has also to be raised. There is also no disagreement about the need for higher expenditure for the economy, it added.

The revenue target set for the next year would not be achieved, Debapriya said.

Citing past trends of revenue collection, he said collection target will fall short of Tk 30,000 crore in the outgoing fiscal. Annual Development Programmes (ADP) targets will also remain unachieved by the end of the current fiscal.

"Similarly, a large portion of revenue collection goal will remain unachieved in the next fiscal year," said Debapriya, adding that revenue collection should be increased by 35 percent to attain the next year's target.

He also said the projections Muhit made are based on the revised budget, rather than on real achievements, which will be clear when the outgoing fiscal's actual data in different sectors such as revenue collection will be available.

Talking about the lack of transparency in specifying various sources of revenue collection, he said, "In the past, we saw that every finance minister shared break-up of revenue collection or loss against the budgetary measures. Why do we not get that break-up now?"

He said the government will have to depend on borrowing mainly from banks and non-banking sources to finance the coming fiscal year's budget due to deficit in revenue collection target. This will increase the interest payment burden unless the government pays attention to utilise foreign aid.

In the proposed budget, the net bank borrowing has been projected at 44.5 percent of the total deficit, up from 41.6 percent in the revised budget of the outgoing year. The flow of foreign aid was also projected to grow but the target of foreign aid flow is "almost impossible" to achieve because of slow pace of implementation, he reflected.

On tax measures, the think-tank hailed the slash in corporate tax rate and a hike in the source tax for exporters. However, it stated that the Tk 4,000 uniform minimum tax for all taxpayers is 'unfair'.

On sector-based allocations, the CPD said allocation for the transport and communication, and power and energy sectors was expected but lamented the drop in allocation for the agriculture and health sectors. Allocation for education also remains below 2 percent of GDP.

Debapriya said increased use of foreign aid might pave the way for making use of more resources in education and health sectors, which remain neglected for lack of fund.

The think-tank believes that sufficient initiatives have not been taken in the budget to boost private investment in the country, which has remained sluggish over the past two years.

The CPD welcomed the children budget but inquired about the schemes that were shared by the finance minister in his previous budget proposals, including district budget, Audit Act for budget implementation and creation of a database for genuine fishermen.

"We are disheartened. We thought district budget is a promising initiative to strengthen local government bodies," he said.

CPD Executive Director Mustafizur Rahman and its additional research director Khondaker Golam Moazzem also spoke at the programme.