The finance minister is set to present the national budget for the 2024-25 fiscal year in the first week of June. But how exactly is this budget prepared? Let's take a closer look.
Understanding the budgeting process
Government budgeting in Bangladesh involves the allocation of resources towards developmental objectives, economic planning, and then monitoring to ensure the stated goals are met. The parliament grants legal authority for the government’s expenditure and taxation proposals for the coming financial year.
The Annual Development Program (ADP), prepared by the Ministry of Planning, outlines about 90% of the development budget. This program lists development projects and is included in the Mid-Term Budgetary Framework (MTBF) document, which projects budgets for one fiscal year and the next two years.
Water, sanitation, and hygiene (WASH) budgeting
The budgeting for water, sanitation, and hygiene (WASH) is complex, involving multiple ministries, institutions, and departments. The Ministry of Local Government, Rural Development, and Cooperatives (LGRDC) is the primary body responsible for WASH facilities, services, monitoring, and policy preparation. Several other ministries are also linked with WASH policy and budget implementation.
The Local Government Division (LGD) under the LGRDC prepares WASH sector budgets and relevant policies. Understanding national and local budgeting processes is crucial in the WASH sector.
Key players in budget preparation
The National Board of Revenue (NBR) generates most of the government's income figures and prepares early projections each year. This enables the National Resource Committee to make informed decisions about available resources and set ceilings for sector ministries before they start their budget preparations. The secretary in each sector ministry acts as the Principal Accounting Officer, ensuring that budgets reflect government policies and political objectives.
Directorates within sector ministries submit their budgets to the Finance Division of the Ministry of Finance. This ensures that each ministry’s budget aligns with both national and sector-specific goals.
District and local-level budgeting
Budgets for various departments at the district and sub-district levels are presented separately from the national budget. Line ministries allocate budgets to line departments and institutions, while district and sub-district budget allocations are presented separately.
District budgets have only recently been introduced. These budgets are distributed to lower levels through two channels: Directly to Union Parishads and through a divisional arrangement (district to sub-district to union).
The allocation is estimated through different projects under the ADP, and implementing organizations, such as the Department of Public Health Engineering (DPHE) at the upazila level, send demand notices to relevant local government departments to receive their allocations.
Challenges and recommendations
The budgeting process at the local level, especially for WASH, is complicated. Local budgets often do not follow per capita allocation or equitable distribution principles. The primary source of development funds for upazilas is inter-governmental transfers through the ADP, remitted quarterly based on factors like population and area. However, the system often falls short in equitable distribution.
Union parishads (UP) receive financial resources from various sources, including internal revenue, government block grants, the World Bank-supported Local Government Support Project (LGSP) III, and other donor agencies. These funds are used for salaries, office maintenance, and development projects.
Community awareness of the budgeting process and the roles of service providers is limited
The complex structure makes it difficult to get a clear picture of available resources. Ministries and departments implement projects at the upazila level but control them from central or district levels.
Upazila parishads access four major types of grants: Earmarked sectorial project grants, program grants, block development grants, and recurrent expenditure grants. The average ADP per upazila parishad is about Tk50 lakh to 70 lakh, with each union receiving only around Tk600,000.
Policy and community participation
Several policies, acts, and strategies guide WASH and Integrated Water Resource Management (IWRM). For instance, the "Upazila Parishad Development Fund Use Guideline" allocates 15% of the ADP for rural health, drinking water supply, low-cost hygienic latrines, and arsenic mitigation. However, these guidelines are often not fully implemented.
Every UP must prepare a budget with community participation 60 days before the fiscal year begins. Active civil society organizations (CSOs) can ensure this happens. The Upazila Parishad Act 2009 mandates oversight of WASH issues, and the Water Rules 2018 provide structures for IWRM committees at upazila and union levels. These entry points for CSOs and NGOs are vital for advocating on WASH and IWRM issues.
People’s participation, Sustainable Development Goal (SDG) commitments, and policy implications at the local level are crucial for effective governance and sustainable development. SDG 6 emphasizes increasing people’s participation in ensuring universal access to water and sanitation. The government recognizes the role of CSOs in SDG implementation, which was previously not encouraged.
Improving awareness and participation
Community awareness of the budgeting process and the roles of service providers is limited. Budget tracking can help engage different stakeholders and create an environment for public participation. It also involves local decision-makers in implementing relevant acts, policies, strategies, and plans, bridging the gap between the community and local government representatives.
To make WASH initiatives sustainable, service providers, public representatives, and community members must understand and apply policies correctly. WASH standing committees at the upazila level, comprising public representatives, citizens, service providers, and community members, need to meet regularly to monitor progress. However, this practice is not widespread unless stakeholders take the initiative.
Finally, for effective inclusion in budgeting, existing systems must be communicated to the public, and political commitment must permeate the entire structure. The SDGs highlight the need for local communities to participate in water and sanitation management, which the local government must address to establish accountability mechanisms.
In conclusion, while the budgeting process for WASH in Bangladesh is complex, understanding the roles of various entities and encouraging community participation can lead to more effective and sustainable outcomes.
Mohammad Zobair Hasan is working in the Development Organization of the Rural Poor (DORP) as a Director (Research, Planning and Monitoring), his research interest lies in the field of water, sanitation and public health and its associated policy and strategy.
