• Monday, Nov 19, 2018
  • Last Update : 12:23 am

Another ambitious budget on the cards?

  • Published at 01:19 am June 6th, 2018
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The government has finished all its preparation to announce the national budget for the 2018-19 fiscal year – the last budget before the national election – at parliament tomorrow. 

Finance Minister AMA Muhith will place the budget proposal, likely to be worth Tk4,68,200 crore – 16% costlier than last year’s proposed budget of Tk4,00,266 crore, according to sources at the ministry. 

Experts say the government has set ambitious targets for itself in the new budget, despite the poor performances by government agencies in implementing the budgets over the last four years.

Budget implementation rate during the current government’s tenure reached its peak at 87% during the 2013-14 fiscal year. 

It is estimated that the rate will fall to 74% in the outgoing fiscal year.

Experts say the low budget implementation rate is mostly the result of poor implementation of the Annual Development Program (ADP) and the ambitious target of revenue mobilization.

In the current fiscal year, the ADP expenditure against the allocation is the lowest in recent years.

Only 50.2% of the original ADP budget was spent during the July-April period of FY18 – lower than the previous year’s 54.7% during the same period.

Revenue collection by the National Board of Revenue (NBR) during July-March period of the outgoing fiscal year fell short by Tk23,007.66 crore: the revenue agency collected Tk1,44,311.28 crore against a target of Tk1,67,318.94 crore in the first nine months of FY18, sources at the NBR said. 

By the end of the year, the shortfall is likely to reach Tk30,000 crore, the sources said.

Dhaka-based policy and economy think tank Centre for Policy Dialogue (CPD) estimates that overall revenue shortfall for 2017-18 fiscal year will likely reach the Tk50,000-crore mark.

“It has become a tradition in our country to announce a record budget every year. No matter what the size of the budget is, how it is implemented is the matter of concern,” said Dr AB Mirza Azizul Islam, former finance adviser to the 2007-08 caretaker government. 

“Although the size of the budget has been increasing every year, the rate of implementation has been going down,” Azizul told the Dhaka Tribune. “The administrative competence and awareness have to be improved before expanding the budget.”

The finance minister also recently commented on the poor implementation rate of the national budget, saying it questioned the capacity of the government.

Eminent businessman and Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Shafiul Islam Mohiuddin said it was necessary to set the size of the budget prioritizing quality and implementation capacity. 

“The budget should be prepared keeping the recommendations made by the stakeholders in mind, because outlining an ambitious budget while focusing on the [upcoming] national election and setting an excessive revenue target may end up having an adverse effect on the economy,” he told the Dhaka Tribune.

The government should keep in mind that the burden that a big budget will have on the people, Shafiul said.

Businesses will also be pressurized by the tax authorities to meet the large revenue collection target, he added.