The size of the budget for FY 2007-08, the first one by the present caretaker government, has finally risen by 30.37 percent to Tk 87,137 crore from the revised budget of the current year, according to the Medium Term Budgetary Framework (MTBF) for the next three fiscal years.

The volume of the budget for fiscal 2008-09 will increase only by 2.07 percent to Tk 88,950 crore and by 13.31 percent to Tk 1,00079 crore in the last fiscal (2009-10) of the government's three-year outline.

The MTBF and other budgetary documents to help get an overview of the future policies were released yesterday.

Earlier on Thursday, the president approved the budget for the financial year about to start without imposing the customs duties that had been proposed. Finance Adviser AB Mirza Azizul Islam is going to announce and explain the changes today.

According to the Budget in Brief publication, in the final budget for 2007-08 the government has changed the non-development expenditure that had been proposed.

The MTBF in its global economic forecast says inflationary pressure in the upcoming year might get even more intense. It, however, projects downward inflation trends in the domestic economy.

According to the mid-term framework, inflation will come down to 5 percent in 2009-10 from the existing 7 percent.

In the MTBF, the government has set three-year revenue earnings plan to meet the budgetary expenditure.

A target of 15.8 percent revenue growth has been set for the 2007-08 FY. For 2008-09, the growth is set at 15.6 percent or Tk 66,260 crore while it is 13.56 percent or Tk 75,250 crore for 2009-10.

To perk up revenues in the coming fiscal years, the government will withdraw tax holiday and tax exemption provisions. The MTBF observes that such provision creates room for tax evasion.

In the framework, the government also hints at reforming the taxation sector. It says the government will introduce strong monitoring system for the field level taxmen.

Besides, systems of uniform tax identification number and full self-assessment system for the taxpayers will be introduced to make the taxation procedure more transparent.

On the expenditure side, the government has already brought 14 ministries under the MTBF. It also has allocations projected for the ministries in the next three years.

There will be some other measures to bring more transparency in expenditure. The government will soon launch a web-based integrated budget and accounts system (IBAS) where information about the allocation and expenditure will be available.

The MTBF noted that high remittance inflow has been one of the major reasons for higher inflation.

Besides, it says, political and market instability, hassles and lack of infrastructure for maintaining the supply chain, and inflationary expectation account for higher inflation.

The government increased its non-development expenditure in the final budget for the fiscal 2007-08 although the overall size of the budget remains unchanged.

In the final budget, Tk 52,900 crore proposed for non-development expenditure rose to Tk 52928 crore.