Budget implementation, a problem

Budget implementation, a problem

Md. Joynal Abdin

The Financial Express on June 30, 2009

THE national budget for fiscal 2009-10 has been placed by the finance minister for its approval. The proposals in the largest budget, so far, will get its approval by parliament on June 30, 2009, following its scrutiny. Hopefully, with some additions or deductions, the budget will be approved for implementation from July 01, 2009.

The finance minister stated in his budget speech that he set the targets, following the vision 2020 of the government, for the macro-economy to secure a sustained gross domestic product (GDP) growth of 10 per cent from 2017 and to raise the contribution of industry to GDP from 28 per cent to 40 per cent. Other goals include raising life expectancy to 70 years, reducing maternal mortality to 1.5 per cent and to scale down child mortality to 15 per thousand births. Reducing the rate of unemployment by 15 per cent and bringing down the population living below the poverty line to 15 per cent are also among the long term objectives.

For increasing of GDP growth to 10 per cent from 2017, Bangladesh has to develop its infrastructure. Export diversification and access to newer markets will be necessary to increase contribution of industry to GDP as projected.

Government can itself generate employment by employing people in vacant positions in different ministries, government colleges and hospitals. The government can also create a congenial business environment for the private sector to increase investment to create more employment.

The budget proposals provide no clear road map of how the government would increase revenue collection. For increased revenue collection, the government can introduce automated export-import system to link the bank accounts of the exporters and the importers with the National Board of Revenue (NBR), Bangladesh Bank and the Port authorities. The NBR can then deduct the tax at source.

For public private partnership (PPP) the government should make it clear who will be the private sector stakeholders. The modalities of implementation need to be explained. The government should remove the bureaucratic barriers to the implementation of the programme.

The use of information communication technology (ICT) pledge would be important to make digital Bangladesh. But automation of government agencies would be necessary to reduce corruption by the government bureaucracy. To digitise Bangladesh, the government should pay its attention to generation of electricity on a priority basis.

The government should identify and remove the barriers in the implementation of the Annual Development Programme (ADP). Otherwise, its vision 2021 would be difficult to achieve. The government needs to change the rules and policies that impede the ADP implementation.

The budget should pay special attention to rural development for poverty reduction. Rural development can increase the export earnings, facilitate product diversification and reduce migration to the cities.

Implementation will be the main challenge for the government. Action, not words, would be needed for achieving of the objectives.

Not a single budget could be fully implemented in the country. The government needs to find out why no budget could be implemented properly and fully so far.

 

Generally, delays in the implementation lead to partial budget implementation. Development projects must be scrutinised by the ministries before approval. For example when project implementation needs to start in July, the ministry does not release the first installment of the money until February. In three months, the fiscal year comes to an end and the project implementation remains incomplete. Delay in project implementation is caused by delayed approval of the project proposal by the ministry.

Often important projects remain unimplemented over the dispute which ministry will implement them. The government should identify and remove the barriers to implementation of the budget.

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Published by

Md. Joynal Abdin

Development Researcher, Columnist and Author

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