The budget implementation rate has been declining steadily over the past seven fiscal years. This declining trend reveals inadequate coordination among government agencies, a non-structured process of revenue collection and expenditure and weak implementation of the Annual Development Programme (ADP)—all of which are widening the gap between planning and execution, say experts.
The rate fell to 81.59 per cent in FY 2014–15 from 84.59 per cent in the previous fiscal year. The rate was 79.12 per cent in FY 2016–17, down from 80 per cent in FY 2015–16. It was 97.05 per cent in FY 2010–11, according to finance ministry data.
Dr Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), told The Independent that the budget implementation rate has been falling consistently because of weaknesses in the budget planning phase.
He said that at the time of preparing the budget, the government first decides on its expenditure, then the deficit, and eventually, the income. "The usual practice is to first fix the income and then the expenditure. So, this reverse system has created inconsistencies and weakened the budgetary discipline," he added.
Budget implementation and economic growth largely depend on meeting the resource mobilisation target, but this is not seen until now, said Moazzem.
"Generally, the yearly revenue growth is between 14–17 per cent in Bangladesh. So, the revenue growth target of 41 per cent was definitely a mismatch and exposed a big gap between the revenue target and actual collection," he also said.
“It shows that budget planning has not been done properly. The set targets are not compatible with reality,” he added.
Moazzem said there is definitely a shortcoming in estimating the domestic resource mobilisation.
If the government enforces the new VAT law, it would generate a higher revenue growth and mitigate the revenue shortfall, he noted.
Weak implementation of the ADP is another reason behind the falling budget implementation rate. The size of the ADP is 38 per cent of the original budget in this fiscal year, said Moazzem.
He also said ADP implementation has been hindered by the inclusion of projects without any feasibility study and inadequate capacity of the agencies and ministries to evaluate and monitor such projects. When resources become scarce in financing the budget, adjustments are made by cutting down expenditures. In most cases, social sectors bear the brunt, he added.
“Centralised budgeting should not be practised in our country, where all budgeting decisions are to be made from a single location,” he suggested.
There is no alternative to district budgets for a strong and effective local government, said the CPD research director.
Dr Sayema Haque, research director of the South Asian Network on Economic Modeling (SANEM), told The Independent that the declining implementation rates indicate capacity problems in the ministries and associated institutions.
They are not skilled enough to handle big projects, she said.
She also said that right persons are not being hired for the right project, resulting in tardy implementation of the ADP.
Coordination problems among government agencies pose another stumbling block to proper ADP implementation, she added.
“Budget implementation should not be quantitative—the amount of money spent should not be the measure of success, but the quality of spending. So, the budget should be based on the quality of spending, which is not evaluated in our country,” she observed.
Citing one example, Haque said: “We must understand our requirements. If a place needs more colleges rather than primary schools, we should build colleges there.”
So, quality evaluation and monitoring are necessary in case of budget implementation, she added.
“If the capabilities and efficiency of the ministries concerned are not improved, it would be difficult for us to address the targets and requirements of Sustainable Development Goals (SDGs),” she said.
The growth of budget allocation in FY2016-17 and in FY2017-18 was 15.42 per cent and 17.52 per cent respectively.
However, budget cuts in the name of presenting a revised form due to lack of implementation capacity is not good for the economy, Haque added.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.
Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.