Budget spadework begins early with polls ahead

Finance officials begin stocktaking of implementation status of the current budget and other economic parameters in early spadework on budgeting for next fiscal year, with the polls close by.
The finance division Tuesday sent letters to the ministries and divisions concerned for updates on statistics up to October as it plans to hold in November this fiscal's first meeting of the committee for coordination on fiscal, monetary, and currency exchange, and resource committee.
Finance Minister AHM Mustafa Kamal heads both the committees, the first meeting of which usually takes place in December. But this time around, the finance officials plan the meet for November in view of the business next month centring the next general election.
The first meeting of the committee usually prepares an outline for next fiscal budget, including the possible size of budget, the requirement of resource mobilisation, setting target for gross domestic product (GDP) growth, possible rate of inflation, and budget deficit, among others.
A senior ministry of finance official told the FE Tuesday this year the rate of budget implementation would be significantly low as it is an election year and the ongoing political disturbances would disrupt implementation of various programmes and projects.
Thus, he said, the overall economic performance may deteriorate, including the GDP growth, which will have a reflection in the budget for next fiscal year.
Citing an example, the official said implementation of the annual development programme (ADP) already faced a big blow with only 7.5-percent execution during the July-September period of the current fiscal year-marking a nine-year low.
The current ADP allocation is Tk 2.63 trillion in the overall national budget of Tk 7.6 trillion. Financing this budget is seen as a tough task, given the overall local and global economic and political perspectives, with the revenue-board chief just appearing sceptical about achieving the set tax-revenue target particularly because of spells of pre-election unrest.
Also the official predicts that overall revenue collection this fiscal may fall following tight-fisted controls on import, although there has been promising performance in tax-revenue collection thus far.
"We are working by keeping all this in mind," he said about a preview of a tailor-made budget for the next fiscal that falls between two regimes.
Contacted Tuesday, Dr Ahsan H Mansur, Executive Director, Policy Research Institute of Bangladesh or PRI, told the FE that the finance division can take some technical preparations now but the broad size of budget needs to be set by a new government, whoever comes to power.
"At present they need to focus on successful implementation of the current budget keeping in mind all the ongoing and impending challenges," he said.
Mr Mansur suggests giving importance to expenditure control, prudent macroeconomic management, controlling inflation, and lessening the requirement of printing taka afresh.
On the budgeting for next fiscal year, he said budget must be small in size and highly focused on reforms.
"We need reform on tax front, have to begin reform activities largely, and steps for exchange-rate management," the economist says about how the budget should fit in context.

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