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Uncategorized - October 18, 2023

Bangladesh never able to implement 100pc budget

86 pc implementation in FY 2023

Mahfuz Emran: Bangladesh never been able to implement 100 percent of the proposed budget. Even last fiscal year highest 86 percent budget has been implemented.
In continuation of the past, it was not possible to implement the revised budget in the last financial year as well. As a result, the implementation rate of the revised budget in the ended fiscal year 2022-23 stood at 86.45 percent. Compared to the price budget, this rate is 84 percent. Recently, the Finance Department of the Ministry of Finance has finalized the budget implementation.
It has been seen that the budget implementation rate has remained almost at the same level for the last few years. The worst situation was in the fiscal year 2020-2021, when the budget implementation rate was 76 percent. A source in the finance department said that this was the condition of budget implementation that year mainly due to covid. However, in the following fiscal year 2021-2022, the budget was implemented 87 percent.
According to sources, the size of the original budget for the fiscal year 2022-2023, which ended last June, was fixed at Tk 678,064 crores. Later it was reduced and the size of the revised budget was estimated at Tk 660,507 crores. In contrast, the total expenditure at the end of the financial year was Tk 571,000 crores. Accordingly, the budget implementation rate in the last financial year stood at 84.21 percent of the original budget and 86.45 percent of the revised budget.
According to the statistics of the Finance Department, the original and revised target of revenue collection under the National Board of Revenue (NBR) for the last fiscal year 2022-2023 was the same ie, Tk 370 thousand crore. Against this, Tk 365,000 crore have been collected. On the other hand, the non-NBR tax collection target was Tk 18000 crore and against it Tk 8000 crore was collected. Apart from this, the amount received without tax was estimated at Tk 45,000 crores and against it the collection was Tk 38,000 crores. That is, the target of revenue collection could not be achieved.
According to sources in the Finance Department, the budget deficit in the fiscal year ended 2022-2023 stood at Tk 250,000 crore. It is 4.6 percent of GDP. To meet the budget deficit, a loan of Tk 125,000 crores has been taken from the banking system and a net loan of Tk 78,000 crores has been taken from foreign sources. In addition, a total of Tk 3,300 crores of interest has been paid in the savings sector.
A review of budget data shows that it is generally not possible to implement the entire budget in any financial year. Even the revised budget is not fully implemented. An average of 81 percent of the original budget and an average of about 87 percent of the revised budget have been implemented in the last five years.
The size of the original budget for the financial year 2021-2022 was Tk 603,681 crores. In the revised budget, it has been reduced to Tk 593,500 crore. Against this, the total expenditure was Tk 521,377 crores. In the previous fiscal year 2020-2021, the budget implementation rate was 81 percent of the original budget. But what happened in the revised budget is 76 percent. In the financial year under discussion, the size of the original budget was Tk 568,000 crores. In the revised budget, it has been reduced to Tk 538,983 crore. Against this, the total expenditure has been Tk 460,160 crores.
Meanwhile, the data available during the budget presentation of the current financial year last June shows that the total expenditure in the first nine months of the ended 2022-2023 fiscal year (July 2022-March 2023) was a total of Tk 302,892 crores and the budget implementation rate was 44.67 percent of the original budget and 45.86 percent of the revised budget. Accordingly, in the last three months of the financial year (April-June 2023), the budget has been implemented 41.78 percent. It can be said that in the last three months of the financial year, almost the same budget as the previous nine months has been implemented.
In this regard, the Finance Department is observing that the implementation of the budget of various ministries and departments and other organizations is usually slow at the beginning of the financial year. Expenditure is also low compared to all other items except salaries and allowances of government employees. Actions are taken towards the end of the financial year especially in the payment of various utility bills, maintenance of repairs, construction and completion works and procurement of goods. Due to these reasons, the expenditure increased in the last quarter of the financial year.
According to the Finance Department, timely and fair budget implementation remains a major challenge. Due to non-implementation of the budget, it is not possible to ensure the quality of government expenditure in many cases. In addition, at the end of the year, the government has to take responsibility for the unplanned debt. As a result, financial discipline can’t be ensured. In this situation, if it is possible to take advance planning and implement it in order to implement the budget properly and on time, the unplanned government debt will be avoided and the debt related expenses of the government will be significantly reduced.

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