Compare National Budget: FY 2020-21 & 2021-22 Page |1

Department of Management Studies

Assignment on
Comparing Budget FY 2020-2021 and 2021-2022
(Top five income and expenditure)
Course Title: Macroeconomics
Course Code: MGT-211

Submitted To:
Kazi Omar Siddiqi
Assistant Professor
Department of Management Studies
Comilla University

Submitted By:
Samit Al Hasan
Reg. No: 12005035
Department of Management studies
Comilla University

Date of Submission : 02-03-2022

Department Of Management Studies, Comilla University

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The Brainiocs
Serial No. Name ID

01 Samit Al Hasan 12005035

02 Kazi Sadia Monnaf 12005009

03 Fahmida Tasnim Tinnee 12005045

04 Fahima Akter 12005005

05 Md Fahim Muntasir 12005048

06 Md Morshed Alam 12005007

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Letter of Transmittal

2 March, 2022
The course teacher
Kazi Omar SiddiqI

Subject : Prayer for granting our term paper

Dear sir,
With due respect, We , the undersigned students of BBA 14 th batch have made a
term paper on “ comparison : national budget FY 2020-21 & 2021-22” ,under the
course macroeconomics.
Though we are in learning curve , this term paper has enabled us to gain insight to
the core facts of national budget. So, it becomes as an extremely challenging and
interesting experience . Thank you for your supportive consideration for formulating
an idea. Without your inspiration this time paper would have been an incomplete
one.

Kindly Awaiting for a positive response from you

Sincerely ,
Samit Al Hasan
ID : 12005035

Department Of Management Studies, Comilla University

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Acknowledgement

By the grace of Almighty Allah we were able to complete our term paper on
“comparison: Budget FY 2020-21 & 2021-22.” Also a special thanks to our course
teacher Kazi Omar Siddiqui Sir for giving us the opportunity to work on this Term
paper.
We have tried to give our best effort to make this term paper perfect and reliable
within the given time, still there might be some mistakes and we would like to
apologize wholeheartedly for the mistakes that occurred. We hope that you would
pardon us for the unconscious mistakes we have made. Your feedback and
suggestions to improve our term paper will be wholeheartedly accepted . Thank you.
Sincerely yours
Samit Al Hasan
On behalf of the group

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Summary
This is an annual budget prepared by the ministry of finance and thus presented to
the parliament for approval every year. From National budget FY 2020-21 & 2021-
2022 we have got some information by doing a analysis. The first step was to select
top five income and top five expenditure. These are the major part of the budget. By
selecting income and expenditure of the Budget of our country FY 2020-21 & 2021-
22 we did a analysis and then compared them. On the basis of the comparison, we
saw a huge difference in different sectors of the budget. Also some income and
expenditure increased & decreased yearly.

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Table of Contents
No Topics Page

01 Introduction 7

02 Objectives of the study 8

03 Limitation of the study 10

04 Literature review 10

05 Methodology of the study 11

06 Data analysis and findings 12

07 Conclusion 16

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Introduction
A budget is a spending plan based on income and expenses. In other words, it’s an
estimate of how much money you’ll make and spend over a certain period of time,
such as a month or year. In other words, a budget is a document that management
makes to estimate the revenues and expenses for an upcoming period based on their
goals for the business.

A national budget is the budget of a country. The government gets money from
taxes and fees, and spends it on things like national defense, infrastructure, grants
for research, education, and the arts, and social programs such as Social Security and
Medicare.
The two basic elements of any budget are the revenues and expenses. In the case of
the government, revenues are derived primarily from taxes. Government expenses
include spending on current goods and services, which economists call government
consumption; government investment expenditures such as infrastructure
investment or research expenditure; and transfer payments like unemployment or
retirement benefits.
National budgets have economic, political and technical basis. Unlike a pure
economic budget, they are not entirely designed to allocate scarce resources for the
best economic use. Government budgets also have a political basis wherein different
interests push and pull in an attempt to obtain benefits and avoid burdens. The
technical element is the forecast of the likely levels of revenues and expenses.

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A budget can be of three types:

 Balanced budget: when government receipts are equal to the government
expenditure.
 Deficit budget: when government expenditure exceeds government receipts.
 Surplus: when government receipts exceed expenditure

Objectives of National Budget

A government budget is a country’s year-long financial report explaining item-wise
calculations of future revenue and expenditure. The budget explains the income and
expense of a nation. Some objectives of national budget mention below
Reallocation of resources – It helps to distribute resources, keeping in view the
social and economic advantages of the country. The factors that influence the
allocation of resources are:
Allowance or Tax concessions – The government gives allowance and tax
concessions to manufacturers to encourage investment.
Direct production of goods and services – The government can take the production
process directly if the private sector does not show interest.
Minimize inequalities in income and wealth – In an economic system, income and
wealth inequality is an integral part. So, the government aims to bring equality by
imposing a tax on the elite class and spending extra on the well-being of the poor.
Economic stability – The budget is also utilised to avoid business fluctuations to
accomplish the aim of financial stability. Policies such as deficit budget during
deflation and excess budget during inflation assist in balancing the prices in the
economy.
Manage public enterprises – Many public sector industries are built for the social
welfare of people. The budget is planned to deliver different provisions for operating
such business and imparting financial help.
Economic growth – A country’s economic growth is based on the rate of
investments and savings. Therefore, the budgetary plan focuses on preparing
adequate resources for investing in the public sector and raising the overall rate of
investments and savings.

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Decrease regional differences – It aims to diminish regional inequalities by

implementing taxation and expenditure policy and promoting the installation of
production units in underdeveloped regions.

Why national Budget is important ?

Every country aims to improve the standard of living of its people and eradicate
issues like poverty, illiteracy, unemployment, income inequality, etc. Budget
measures help the government in meeting these goals. A budget gives an overview
of the fiscal policy of the government. The public can see how much and on what
items the government spent in the last fiscal year. The budget also shows itemized
receipt, which reveals the sources from the revenue for these expenditures that were
generated .
Today every country aims at its economic growth to improve living standard of its
people. Besides, there are many other problems such as poverty, unemployment,
inequalities in incomes and wealth etc. Government strives hard to solve these
problems through budgetary measures.
The budget shows the fiscal policy. Itemwise estimates of expenditure discloses how
much and on what items, the government is going to spend. Similarly, itemwise
details of government receipts indicate the sources from where the government
intends to get money to finance the expenditure.
In this way budget is the most important instrument in hands of governments to
achieve their objectives and there lies the importance of the government budget.

Objectives of the study

 To describe data with descriptive statistical representation.
 To find out the ways of making the budget more effective and efficient .
 To have practical knowledge on the natural budget used in our country.
 To work with statistical data and analysis
 To get involved in real projects related with our economy
 To interpret the results of statistics analysis
 To make inferences about the population from sample data .
 To obtain more knowledge about the budget influencing factors .

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Limitations of the study

Some major limitation that we faced during the study stated below :
 The lack of proper knowledge .
 The lack of funding necessary .
 We get the prescribed budget but we do not get the actual budget.
 As most of the data is collected from secondary sources, there was very little
opportunity to analysis data
 Lack of understanding one of the major problems we have faced.

Literature Review
 Koontz and O’ Donnell define, “Budgets are statements of anticipated results,
in Financial terms as in revenue and expense and capital budgets or in non-
financial terms as in budgets of direct labour-hours, materials, physical sales
volume, on units of production. ”
 Budget is a financial and quantitative statement that represents a number of
intends and policies. Although it identifies and quantifies targets and provides
a framework for management and control, the budget actually a forecast.
(Agalega, 2014)
 In the words of G.R. Terry, “A budget is an estimate of future needs arranged
according to an orderly basis, covering some or all of the activities of an
enterprise for a definite period of time”.
 Anderson (2000) defines a budget as a procedural way of allocating
economic, physical, as well as human resources to achieve the long term goals
of firms.
 In the words of G.R. Terry, “A budget is an estimate of future needs arranged
according to an orderly basis, covering some or all of the activities of an
enterprise for a definite period of time”.
 Lucey (1993) defines budget as a plan of action before the time it relates and
presented in monetary terms and approve before the period.

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Methodology of the study

There are three types of research report e , like as (1) Descript report (2)Exploratory
report and (3)Causal report . This report is a descriptive report as it is giving overall
idea about comparing National Budget FY 2020-2021 and 2021-2022 .This research
is prepared with secondary data . For prepare this report , we took help the financial
ministry official website .

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Data Analysis and findings

Income of national budget FY 2020-2021 and FY 2020-2022

Here , we analyse top 5 national income . Value added tax , Tax on income profit &
capital gain , Supplementary tax , Import duty next one is Administrative fees are
top 5 national income of Bangladesh . Here we explain with percentage of top 5
income sources .
Sectors FY 2020-2021 FY 2021-2022

Taka(Cores) Percentage(%) Taka(Cores) Percentage(%)

Value Added Tax (VAT) 1,25,163 38% 1,27,745 38%

Taxes on Income Profits 1,03,945 31% 1,04,952 32%

and Capital Gains
Supplementary Tax 57,815 17% 54,465 16%

Import Duty 37,807 12% 37,907 12%

Administrative Fees 6,514 2% 7,208 2%

Total 3,31,244 100% 3,32,277 , 100%

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Graphical Representation

40 38% 38%

35 32%
31%
30

25

20 17% Graphical Representation 16%

15 12% 12%
10

5 2% 2%
0
2020-2021 2021-2022
Valu Added Tax (VAT) Taxes on Income Profits and Capital
Supplemetary Tax Import Duty
Administrative Fees

Figure.01 Income of national budget FY 2020-2021 and 2021-2022

Findings:
Comment on top five national incomes: FY 2020-21 and 2020-22
1. Value added tax: With comparing FY 2020-21 and 2020-22 we find out that Value
added tax are equal now. Value added tax of 2020-2021 is 38% and next year we
find out same as previous 38% .
2. Taxes on income profit & capital gain: With comparing FY 2020-21 and 2021-22
we find out that in 2021-2022 tax on income profit & capital is greater now. We can
see that percentage of Taxes on income profit and capital in 2020-2021 is 31% and
in2021-2022 is 32 % .
3. Supplementary tax: With comparing FY 2020-21 and 2020-22 we find out
percentage is 17% and 16 % respectively . It represent supplementary tax are less
now.
4. Import duty: With comparing FY 2020-21 and 2020-22 we find out percentage
growth 12% and 12% . We find put that Import duty are equal now.

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5. Administrative fees: With comparing FY 2020-21 and 2021-2022 we find out that
administrative fees are equal now. Percentage of 2020-2021 is 2% and 2021-2022
is 2% , which represent same portion .

Expenditure of national budget FY 2020-2021 and FY 2021-2022

Here , we analyse top 5 expenditure of national budget . Public service , Local
Government and Rural Development , Defence service , Education and Technology
next one is Health are top 5 national expenditure of Bangladesh
Sectors FY 2020-2021 FY 2021-2022
Taka(Cores) Percentage(%) Taka(Cores) Percentage(%)

Public Services 1,80,715 49% 1,85,423 47%

Local Government and 39,573 11% 42,192 11%

Rural Development
Defence Services 34,882 9% 37,735 10%

Education and 85,760 23% 94,875 24%

Technology
Health 29,246 8% 32,731 8%

Total 3,70,176 100% 3,92,956 100%

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Graphical Representation

60
49%
50 47%

40

30
23% 24%

20
11% 11% 10%
9% 8% 8%
10

0
2020-2021 2021-2022

Public Services Local Government and Rural Development

Defence Services Education and Technology
Health

Figure : 02 Expenditure of National Budget FY 2020-2021 and 2021-2022

Findings:
Comment on top five expenditure: FY 2020-21 and 2020-22
1. Public services: Percentage of public service in 2020-2021 is 49% and in 2021-
2022 is 47 % . With comparing FY 2020-21 and in 2020-22 we find out that for
public services expenditure is lower now.
2. Local government & rural development: Percentage of Local government & rural
development in 2020-2021 is 11% and in 2021-2022 is 11% .With comparing FY
2020-21 and 2020-22 we find out that for Local government and rural development
expenditure are equal now.
3. Defense services: With comparing FY 2020-21 and 2020-22 , We find out that for
Defense services expenditure is greater now.

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4. Education & technology: With comparing FY 2020-21 and 2020-22 we find out
that for Education & technology expenditure is greater now. Percentage of
Education and technology in 2020-2021 is 23% and in 2021-2022 is 24%
respectively .
5.Health: With comparing 2020-21 and 2020-22 FY we find out that expenditure
health are equal now. Expenditure of Health service in 2020-2021 is 8% and in 2021-
2022 is 8 % , which represent same portion .

Conclusion
Conclusion: Finally, we explain and discuss here about top five income and
expenditure for the year 2020-21 to 2021-22. Top five income is taxes on income
profits and capital gains, supplementary tax, administrative fees, value added tax and
import duty. In 2020-21 taxes on income profits and capital gains was 31% then
increase to 32% in 2021-22. More income gained from supplementary tax in 2020-
21 then from 2021-22. Top 5 expenditure is public services, local government and
rural development, defense services, education and technology, health. In 2020-21
expenditure in public services was 49% then reduced to 47% and in defense
increased to 10%.Expenditure in education and technology increased.

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Reference :
 https://mof.gov.bd/site/budget_mof/2fbdbbbe-e514-4f14-a2a3-
fdf819e088f4/-Budget-at-a-Glance
 https://byjus.com/commerce/objectives-of-government-
budget/#:~:text=of%20an%20Economy-
,Objectives%20of%20Government%20Budget,%C2%A9%C2%A02022%2
C%20BYJU%27S.%20All%20rights%20reserved.
 https://www.yourarticlelibrary.com/budget/budgeting-definition-and-
characteristics-of-
budgeting/25761#:~:text=Budgeting%20%3A%20Definition%20and,results
%20stated%20in
 https://en.wikipedia.org/wiki/2021_National_budget_of_Bangladesh#:~:text
=2022%C2%A0%E2%80%BA-
,The%202021%20National%20budget%20of%20Bangladesh%20was%20pr
esented%20by%20the,Significant%20announcements,-%5Bedit%5D
 https://byjus.com/commerce/objectives-of-government-
budget/#:~:text=Types%20of%20Budget,Flow%20of%20Income
 https://bethebudget.com/why-is-budgeting-
important/#:~:text=Budgeting%20is%20one,going%20to%20take

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