Policymaking suffers for lack of accurate fiscal data

For a lack of accuracy and consistency, fiscal data cannot adequately meet policymaking needs in Bangladesh and result in generating irregularities, according to a study.

The study, conducted by the Centre of Policy Dialogue, says a poor state of availability of and accessibility to fiscal data fails to ensure transparency and accountability in the country.

It notes that accuracy of the data has been repeatedly brought under scrutiny since different sources publish different figures for the same indicator.

"Accuracy of fiscal data in Bangladesh has been repeatedly brought under scrutiny as different sources published different figures for the same indicator and same source published different figures for the same indicator over time," it is stated in the study report.

The CPD published the study report titled 'Fiscal data in Bangladesh: Issues and Challenges' at a virtual dialogue held Thursday.

The study was conducted aiming to provide an assessment of fiscal- data ecosystem in Bangladesh, identify its challenges and contribute to decision-making to promote openness and transparency of the reckonings on fiscal matters.

Lacking in timely disclosure of fiscal data is constraining delivery of the national budget and depriving the marginalised citizens in Bangladesh of receiving the required government support, it was found in the study.

"Improvement in the area of fiscal data would require considerable political will and a change in the mindset of core actors," Towfiqul Islam Khan, senior research fellow of the CPD, said presenting the keynote.

The policy think-tank feels that there is a need for a big push from the demand side, particularly on part of policymakers, including the elected public representatives, for producing adequate and authentic information on fiscal matters for right policymaking.

"The non-state actors, i.e., CSOs and media need to maintain their demand at the same time," the keynote notes.

CPD search found no institutional mechanism or data protocol to ensure timely delivery of accurate and accessible fiscal data, while the best use of existing resources such as the iBAS++ remained untapped.

In order to address these issues, the researchers suggest strengthening inter-and intra-agency coordination and appointing dedicated personnel to carry out data-related activities.

Stressing vigorous use of the iBAS++ system, the CPD says monthly reports of budget implementation based on budget documents titled 'Combined Demand for Grants' and 'Consolidated Fund Receipts' should be prepared based on iBAS++.

Making a point that the fiscal data have often been questioned for inconsistency and accuracy, it cites the case of tax collection.

For example, it says, the National Board of Revenue tax-collection-data discrepancy between sources was -1.52 per cent from the Ministry of Finance (MoF), 3.0 per cent from the departure for the Annual Development Programme (ADP) and deficit financing was 31.44 per cent.

Meanwhile, the source-wise comparison has revealed that the Bangladesh Bank has the most updated monthly data while the MoF has the least updated monthly data pertaining to the fiscal year 2022.

The expenditure domain (operating, development and other) is relatively lagging behind in terms of agility, the study says.

According to the think-tank a number of documents, indicators and analyses need to be made available by the government in a timely manner in order to support the budgetary decision-making process.

The documents include pre-budget statement, in-year, mid-year and year-end budget reports and audit reports. Indicators include revenue forgone due to tax exemptions and actual expenditure for social protection, while analyses include impact analysis of fiscal measures.

Dr Debapriya Bhattacharya, Study Team Leader and Distinguished Fellow at the Centre for Policy Dialogue, chaired the session. In his remarks he re-emphasised that fiscal data have a critical role not only from the perspectives of accountability and transparency for the development process of the country but also for policymaking.

"The prevailing dearth of timely delivery of quality fiscal data as per the demand may have emerged from several sources, including lack of awareness, capacity, urgency for sustainability, and absence of procedure and application," he says.

Professor Rehman Sobhan, Chairman of the CPD, hypothesised that the quality of data would be maintained if the generated data are derived from the needs of the primary data users, that is, policymakers.

"However, the majority of demand for change in data quality comes from outside the government, which is a critical weakness as the driver of change should be from within the government," he says.

Dr Md. Abdus Shahid MP, Member of the Parliamentary Standing Committee on Public Accounts, underscored the fact that only data- driven decisions can make policymaking more transparent.

The issues and challenges are not about fiscal data but rather about statistical data, stated Saber Hossain Chowdhury MP, Chairman of the Parliamentary Standing Committee on the Ministry of Environment, Forest and Climate Change and Member, the Parliamentary Standing Committee on the Ministry of Planning.

He also adds that data revolution is a key prerequisite for achieving sustainable development goals.

Kazi Nabil Ahmed MP, Member of the Parliamentary Standing Committee on the Ministry of Finance, said data on the vaccination process had been collected at the upazila level from district health offices and disseminated every three months during the pandemic.

"However, we don't have a complete breakdown for cross-analysis," he told the meet.

"For Bangladesh, data terrorism has emerged as one of the main challenges," said Shameem Haider Patwary MP, Member of the Parliamentary Standing Committee on the Ministry of Law, Justice and Parliamentary Affairs.

"The story told by data often is not reflective of the actual scenario," he added.

He suggests think-tanks such as CPD should train MPs in data studies for crucial matters such as budget formulation.

Dr Zahid Hussain, former Lead Economist, the World Bank, was present as a distinguished discussant and mentioned that data regarding state-owned enterprise are crucial and reformation is needed in this regard.

"Moving forward will include providing a calendar for data release as well as for data revision, especially given that data discrepancy is unavoidable," he said.

Ranjit Kumar Chakraborty, former Additional Secretary, the Ministry of Finance, said regarding data revisions when a fiscal year closes, the bottom-line data should be unchanged, while there may be some adjustments within three months.

A discrepancy in data, such as between NBR and CGA counts, may be a result of tax payment made through pay order. "This will show up for NBR as a receipt but not for CGA because the tax payment hasn't been encashed," he said.

Kazi Faisal Bin Seraj, Country Representative for The Asia Foundation, during his introductory remarks, stated that it has become increasingly important to look at Bangladesh's growth and the efficiency of the growth.

"This is where data plays a major role," he added.

[email protected]