Though the IMF advised keeping the budget size around Tk 67,000 crore, the government has settled for about Tk 70,000 crore.

The revised budget for FY 2005-06 is close to Tk 61.000 crore while the original one was Tk 64, 383 crore. The IMF had also suggested keeping the revised budget around Tk 58, 000.

Finance and Planning Ministry sources said they do not think it will be possible to achieve the earning and expenditure targets of the next budget.

They however said though the budget size is large, the deficit will be within 4 percent due to the big GDP (gross domestic product) size. Bangladesh Bureau of Statistics (BBS) has estimated the GDP size at Tk 4,16,155 crore for this year at current market price, and government projection of the GDP size for the next year is Tk 4,65,300 crore.

Finance Minister M Saifur Rahman is presenting the fifth budget of the coalition government, and his 12th in parliament today.

The coalition government will have less than four months of its tenure after the budget is placed. A caretaker government will then be in place for three months followed by a newly elected one.

Sources said the IMF has conveyed the government that unless oil prices are adjusted, it will not release the sixth tranche of Poverty Reduction Growth Facility (PRGF) loan by July as was scheduled.

But the government sticks to its stance that it would not raise oil prices during the rest of its tenure.

An adviser of former caretaker government said it is very unlikely that the next caretaker government will do anything about oil prices. If there is no serious foreign currency crisis, the caretaker government is most likely to pass on this responsibility to the new elected government, he said.

Sources said if that happens, both the 6th and 7th tranche of the PRGF loan amounting to around $160 million will be deferred at least till the next FY end. And in case of the PRGF loan being deferred, the World Bank's (WB) Development Support Credit (DSC) fourth tranche -- $200 million -- might also be deferred to FY 2007-2008.

Like the previous budgets, the present one too has included the PRGF and DSC loans as major sources of foreign finance.

In the current budget, the government has set net foreign financing at Tk 8,300 crore but according to IMF projection, the amount stands at Tk 5,700 crore. The IMF has projected foreign finance to the tune of Tk 7,500 for the next FY, but in case the PRGF and DSC are not available, the amount will come down significantly.

Moreover, NBR (National Board of Revenue) officials are sceptical about the 18 percent targeted growth in revenue collection. Many of the NBR initiatives for revenue collection have been either stalled or going slow due to the election ahead. It is a transitional period now, so it won't be really possible for them to go on with an aggressive drive for revenue collection.

Usually the initial revenue target is downsized in a revised budget, and even that target is seldom achieved.

Terming the revenue growth target 'possible only on paper', sources said if foreign aid drops on top of it, bank borrowing will increase.

According to IMF estimates, the government will have to borrow Tk 6,400 crore from banks in the next FY while the bank borrowing target is Tk 3,600 crore in the current FY.

Sources said the estimated bank loan in this FY can reach Tk 5,600 crore as foreign aid will drop and revenue collection will slow down. And, if the next budget has to be fully implemented, bank loan may even exceed the IMF's projection.

The ADP size of the current FY-- Tk 21,500 crore -- is also not achievable, according to the MF, which suggested keeping it at Tk 19,000 crore.