The Financial Express

Actual budget size shrinks

Implementation rate slips to 80pc

| Updated: June 08, 2018 17:35:03

Actual budget size shrinks

The rate of budget implementation in the country has been shrinking gradually over the years, according to government data.

This implies that there is an increasing gap between the original budget size and the eventual figure of it.

In the public finance domain, the government places an original budget in June.

It revises the fiscal blueprint sometime in January by reducing the size on an average of Tk 120 billion.

The actual implementation becomes much lower than the revised one.

Between fiscal year 2010 and fiscal year 2018, the average rate of implementation was just 82 per cent, an analysis of the data shows.

But in the last couple of fiscal years-FY-2016 and FY 2017-the actual budget implementation rate fell significantly.

The rate was 80 per cent in fiscal year 2016 and below 80 per cent in FY 2017.

During the nine months of the outgoing financial year (2017-18), the actual budget implementation rate was just 41 per cent.

Economists say the budget implementation capacity is not growing progressively keeping pace with the increased sizes of the budgets.

They said the citizens are not getting due benefit of the budget as a result of the poor implementation rate of actual budgets.

Dr Mirza Azizul Islam, a former finance adviser, termed this as "a matter of growing concern."

He blamed the lack of accountability in the government machinery for the situation.

"To my mind, if there were accountability, such slow implementation would have never happened," Dr Islam said.

He, however, suggested placing realistic budgets so that those can be implemented fully.

Dr Mustafa K Mujeri, Executive Director at the Institute for Inclusive Finance and Development (InM), said the people are not getting due benefits of the increased size of the budget owing to the poor rate of actual implementation.

"We're seeing a widening gap between the size and the implementation rate every year, but there is no move to overcome it yet."

Mr Mujeri, who was the chief economist of the Bangladesh Bank, said there are many reasons behind the poor pace of implementation over the time.

"Political economy and good governance may be two reasons behind such a situation," he told the FE.

Mr Mujeri noted that the implementation rate became too poor in recent years.

He said there is a need for enhancing the capacity of the implementing agencies prior to making bloated budgets.

The average budget size was Tk 2.57 trillion in the period from FY' 2010 through FY' 2018.

And the average revised budget size was Tk 2.2 trillion. The actual size of budget implementation stands at Tk 1.8 trillion on an average over the years.

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