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Experts moot idea of central financial commission

Call for introducing ‘district budgets’

FE Report | February 25, 2019 00:00:00

Formation of a central financial commission was suggested at a function in Dhaka Sunday to oversee allocations made in the national budget and development of tax structure to help make the budget participatory.

The proposed commission will address budget implementation challenges and ensure fair distribution of allocations, said former central bank governor Dr Atiur Rahman.

Dr Atiur made the proposal at an event styled 'National Dialogue on Alternative and Participatory Budget' hosted by Democratic Budget Movement in Dhaka on Sunday.

The economist said people pay tax both directly and indirectly. But there is no estimate how much revenue comes through indirect taxation.

"The commission will help develop a tax structure and decide where to impose tax and how much revenue is earned from indirect tax," he added.

Mr Rahman said people pay tax but the quality of public services is not improving. Their expectations will have to be reflected in budget, he added.

Enough allocation should be in the budget to create and nurture new entrepreneurs, he observed.

The budget should accentuate social protection measures like universal pension scheme, insurance and safety net for low-income groups, he cited.

Economist Prof MM Akash of Dhaka University said an extreme centralised budget remains a problem.

"Budgets at district level and their strong central coordination are necessary solution to the problems of centralised budget," he mentioned.

He said at least two pilot projects could be run to see how a decentralised budget works and how it could be developed gradually on a trial-and-error basis.

Prof Akash also supported the proposal of forming a financial commission to help bring transparency in revenue collection in districts.

Meanwhile, Prof Abu Yusuf of Dhaka University said the government might consider starting the financial year from the month of January.

One 'draft' budget prepared three months before an original one might make it more participatory, he opined.

Rasheda K Choudhury, former adviser to a caretaker government, said members of school managing committees in rural areas are selected on political considerations.

"They are running schools according to their political interests and sweet will."

This is a simple example of how much rural political elite and vested groups control everything, she said.

Ms Choudhury expressed her doubt about budget or budget implementation becoming participatory in such a situation.

She said the formation of a financial commission could prevent discrimination in budgetary allocations for districts by improving coordination.

Some districts get higher allocation and some others remain deprived due to political influence in budgetary allocations, said Khondakar Golam Moazzem, research director at the Centre for Policy Dialogue.

He said political leaders take higher allocations for their own districts, thus depriving other districts and hampering equal development.

Referring to Barguna, Transparency International Bangladesh head of climate finance governance Zakir Hossain Khan said the district has long been demanding a climate budget for high climate risks.

"Interestingly, Trishal upazila of Mymensingh district got a project instead, although it's not facing any climate risk," he deplored.

Mr Khan said many districts are not getting right volume of allocation due to political reasons.

Shastho Adhikar Andolon convener Dr Rashid-E-Mahbub said budgetary allocation is enough for health sector but the problem is about releasing the funds.

He said earnings from the health sector go to the government's exchequer. Health department should be authorised to spend some of it to improve services.

Monwar Mostofa, executive member of Democratic Budget Movement, presented a concept paper on an alternative and participatory budget at the event.

Democratic Budget Movement chairman Pratima Paul Mazumdar said the government has to go to people at grass-roots level.

"Every district has its potential and unique problems that only district budgets can address," he maintained.

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