3-yr budgetary framework yet to bear fruits
Monday, 25 June 2007
S M Jahangir
Introduction of the Medium Term Budgetary Framework (MTBF) by the government is yet to serve the purposes mainly because of the absence of a proper execution process.
The government had introduced the MTBF, a new budgeting approach, from the fiscal year (FY) 2005-06 in line with the recommendation of the Public Expenditure Review Commission (PERC).
The main objectives of the three-year budgetary framework are to make the public financial management more disciplined, efficient, dynamic and time-bound, said an official source.
Another important feature of the budgeting system is allocation of resources according to the strategic objectives, policies and priorities, as laid in the National Strategy for Accelerated Poverty Reduction (NSAPR).
Initially, budgets for four ministries - Education, Social Welfare, Women and Children Affairs, and Agriculture - were prepared for three fiscal years until FY 2007-08 on an experimental basis under the MTBF.
A total of 14 ministries and divisions, which together account for around 60 per cent of government spending, have come under the MTBF procedures.
One of the main concepts of introducing the MTBF was to make the government agencies self-reliant both in preparation and implementation of their respective budgets and ensure their active participation in the entire development activities, the official added.
But all matters relating to allocation and release of development funds, and selection of projects and their approval processes are yet to get rid of the traditional budgeting practices, sources said.
Former agriculture minister MK Anwar at a post-budget discussion recently observed that no visible change in the budgeting system had been reported following introduction of the MTBF.
He also blamed the Finance and Planning Ministry for non-fulfillment of the MTBF targets.
'Though it is said the necessary funds will be given to the ministries under the MTBF for making the development expenditures on their own, there is no difference between the new budgeting approach and the traditional practice,' he said.
Anwar, however, emphasised the need for bringing about major reforms in the said ministry to make the MTBF purposeful and effective.
A finance ministry source, on the other hand, said under the new system individual ministries will enjoy full authority in both fixation of their own fund requirements for various development programmes and their utilisation.
"All responsibilities relating to preparation of budget and its implementation will be given to the respective agencies," the official said, adding the Ministry of Finance will only be required to pass their budgets.
The official expressed the hope that the new system would play a significant role in implementation of the government's overall Annual Development Programme (ADP).
According to officials, the system has been adopted to ensure stability in the budgetary management in the short-term, keeping the public expenditure within a sustainable limit in the medium and long terms and accelerating pro-poor economic growth at the same time.
Other objectives of the MTBF is to improve macroeconomic stability by matching expenditures and resources as projected in it and remove the demarcation between development and non-development budgets gradually by joint programming of their spending, they mentioned.
They, however, said since the MTBF is a new system, some problems could be there in the process of its successful implementation.
They also suggested that the concerned agencies should actively participate in the MTBF process to get maximum benefit from it.
Introduction of the Medium Term Budgetary Framework (MTBF) by the government is yet to serve the purposes mainly because of the absence of a proper execution process.
The government had introduced the MTBF, a new budgeting approach, from the fiscal year (FY) 2005-06 in line with the recommendation of the Public Expenditure Review Commission (PERC).
The main objectives of the three-year budgetary framework are to make the public financial management more disciplined, efficient, dynamic and time-bound, said an official source.
Another important feature of the budgeting system is allocation of resources according to the strategic objectives, policies and priorities, as laid in the National Strategy for Accelerated Poverty Reduction (NSAPR).
Initially, budgets for four ministries - Education, Social Welfare, Women and Children Affairs, and Agriculture - were prepared for three fiscal years until FY 2007-08 on an experimental basis under the MTBF.
A total of 14 ministries and divisions, which together account for around 60 per cent of government spending, have come under the MTBF procedures.
One of the main concepts of introducing the MTBF was to make the government agencies self-reliant both in preparation and implementation of their respective budgets and ensure their active participation in the entire development activities, the official added.
But all matters relating to allocation and release of development funds, and selection of projects and their approval processes are yet to get rid of the traditional budgeting practices, sources said.
Former agriculture minister MK Anwar at a post-budget discussion recently observed that no visible change in the budgeting system had been reported following introduction of the MTBF.
He also blamed the Finance and Planning Ministry for non-fulfillment of the MTBF targets.
'Though it is said the necessary funds will be given to the ministries under the MTBF for making the development expenditures on their own, there is no difference between the new budgeting approach and the traditional practice,' he said.
Anwar, however, emphasised the need for bringing about major reforms in the said ministry to make the MTBF purposeful and effective.
A finance ministry source, on the other hand, said under the new system individual ministries will enjoy full authority in both fixation of their own fund requirements for various development programmes and their utilisation.
"All responsibilities relating to preparation of budget and its implementation will be given to the respective agencies," the official said, adding the Ministry of Finance will only be required to pass their budgets.
The official expressed the hope that the new system would play a significant role in implementation of the government's overall Annual Development Programme (ADP).
According to officials, the system has been adopted to ensure stability in the budgetary management in the short-term, keeping the public expenditure within a sustainable limit in the medium and long terms and accelerating pro-poor economic growth at the same time.
Other objectives of the MTBF is to improve macroeconomic stability by matching expenditures and resources as projected in it and remove the demarcation between development and non-development budgets gradually by joint programming of their spending, they mentioned.
They, however, said since the MTBF is a new system, some problems could be there in the process of its successful implementation.
They also suggested that the concerned agencies should actively participate in the MTBF process to get maximum benefit from it.