Addressing problems of budget implementation

Now that the national budget for the fiscal year (FY) 2014-15 -- the terminal year of the Sixth Five Year Plan period -- has come into effect, the government will have to go the extra mile for its implementation as far as possible. There is already a wide gap between what the medium-term plan had promised and targeted and what the actual situation now is. This is particularly so, as far as growth and investment targets, physical and social infrastructural facilities, poverty reduction, inclusive growth etc., are concerned. All concerned also know it quite well that infrastructure deficit has not improved to any notable extent. Far from pursuing the sustainable path for making progress on this particular count, the government has preferred ad hocism. Its continued dependence on energy-guzzling rental and quick-rental power plants that have been entailing a large burden on its budgetary resources will bear this out. Things are hardly any better in many other areas.  
The current investment situation does itself negate the Finance Minister's claim made in his budget speech on June 05 last, that "the economy, now, is back to its robust past."  The reasons why private investment, in particular, has remained weak demand a close scrutiny. Underutilisation of the ADP (Annual Development Programme) fund, in real terms and also in relation to the targeted physical progress in implementation of many specific projects, brings the capacity-related and other governance-specific issues to the fore. In such a situation, growth remains still vulnerable. Furthermore, the prospects for sustainability of stable macro-economic conditions are now blurred because of slowed-down export growth, negative trends in the growth of remittance flows and bulging pipeline of external aid in a situation where external hard-term borrowings by the government and the private sector have tended to surge.
Meanwhile, growing income inequality is posing yet another challenge to promoting inclusive growth and eradicating extreme poverty sooner rather than later. Here, the problems are compounded by 'governance deficit', particularly on the part of those involved in implementation of budget. Revenue-enhancing tax policy measures that are critically important for providing the wherewithal for the national budget of Taka 2.50 trillion for FY 2014-15 against the revised one of Taka 2.16 trillion for the last fiscal year, will be too difficult to implement, if such 'deficit' persists. This is obvious under the prevailing circumstances in the country where the top 10 per cent of its population reportedly own 35 per cent of the national income but do not pay their fair share of taxes. This is borne out by the fact that collections of personal income taxes constitute a meagre 1.5 per cent of the country's gross domestic product (GDP).  
There are multi-pronged issues and challenges for the government to address, if it really means business about achieving the goals and objectives of the national budget for FY 2014-15. Besides revamping the operations of the National Board of Revenue (NBR), the government will require to avoid taking upon itself the burden of contingent liabilities of public enterprises to meet their unfunded deficit. Right from the beginning of the new fiscal year, it has to be proactive about its structural reform agenda. Here the agenda must not fail to aim at improving governance, meeting infrastructure deficit, ensuring quality of public expenditures, avoiding the practice of including unapproved projects in the ADP as far as possible. The government must also put emphasis, at the same time, on proper and timely implementation of its on-going projects, strengthening social protection and improving service delivery through effective administrative decentralisation and development devolution. These are certainly big tasks but quite unavoidable ones. Proper implementation of the budget will call for actions - quite early on - to address them effectively and properly.