MPs never question budget implementation: Rehman Sobhan

Centre for Policy Dialogue (CPD) Chairman Professor Rehman Sobhan has described the national budget as just a set of numbers produced without proper consultation with the Members of Parliament (MPs) and directions for implementation.

He says the only relevant number in the budget is the degree of expenditure.

"In the first 10 months of the fiscal year, 40-50% of the money is spent and then through some unique acts of necromancy, we manage to spend another 20-30% in the last two months," he told a virtual dialogue on the national budget organised by the CPD on Saturday.

He said there is the tradition of referring the budget to a parliamentary committee in most countries, including India, where it is intensively dissected and the final report is then presented to Parliament, where it is discussed again further.

"Why does our Parliament spend so little time on discussing the budget?" he questioned.

He said most of the lawmakers spend their time praising the budget. "No one dissects it, except for a few lone MPs."

The noted economist said MPs never raise questions about the previous budget's implementation, adding they owe their constituencies and the country a better analysis of the budget.

"We have been discussing the budget in detail at the CPD and other think tanks for the last 20 years, but that should not be the case. The place where the budget is seriously discussed in a civilised country is Parliament," he said.

He expressed concern over the quality of budget implementation, the lack of fiscal initiatives to combat the Covid-19 crisis, and the absence of data on the new poor.

Planning Minister MA Mannan, who was the chief guest at the event, said it is true that there is a lack of institutional capacity to implement the budget and measure the quality of implementation.

He said budget implementation is measured by financial progress in Bangladesh while the Implementation Monitoring and Evaluation Division (IMED) assesses physical progress.

"The IMED is also facing problems due to low capacity. The implementation rate remains low in the first three quarters and then accelerates in the last two months due to delays in disbursement."

He said the government has a plan to expand the IMED by introducing offices in several districts, but public officials are against this.

Mannan acknowledged the lack of information on the new poor and said it is true that the number of poor people has increased. He said a further increase in the number would create a disaster.

He also said the government is working to strengthen the Bangladesh Bureau of Statistics with support from the Bangladesh Institute of Development Studies and some other global institutes.

Dr Fahmida Khatun, executive director at the CPD, presented the keynote and said though revenue increased in the first 10 months of the current fiscal year, it still remained below the expected level.

She said another 122% growth in tax collection would be required to meet the target and the government would face a revenue shortfall of about Tk80,000 crore in the present fiscal year.

The government spent only 42% of the budget in the first 10 months, which was 2 percentage point lower than that of the previous year, she said.

The Annual Development Programme implementation also remained below half the allocation during this period, with the Health Services Division spending only 25% of its development allocation, the CPD official said.

She said expansionary fiscal spending would help the poor and increase their purchasing power through the circulation of money.

"Despite huge demand, spending of allocation remained low," she said, adding budget deficit fell by 42% though it was expected to increase.

Saber Hossain Chowdhury, chairman of the parliamentary standing committee on the environment ministry, said there are some inconsistencies in information and a lack of data. He asked how the government is producing data-driven information with old data.

He said there could be debates and dissents in policies and strategies, but statistics should be unique.

"A participatory budget is required to ensure sustainable development by reducing the waste of public resources, but there is not much discussion on budget in Parliament," he said.

The former finance minister discussed the proposed budget in several meetings with the chairs of the parliamentary standing committees, but the current one did not follow the tradition, he said.

"Are we in Parliament to say yes or no?" he asked and said the duty of MPs is to speak for the mass people. If their duty becomes saying yes to the proposal of the government, the budget session becomes useless, he said.

Saber said the government has no intention to bring massive changes to the proposed budget at the final stage prior to approval. He emphasised pre-budget consultations.

He said qualitative implementation of the budget should be assessed along with financial implementation to ensure the best value of public resources while the impacts of spending should be assessed.

Dr Salehuddin Ahmed, former governor of the Bangladesh Bank, said the finance minister wants to do a lot of new things in the proposed budget but due to a lot of initiatives, the budget failed to identify the proper priorities.

"The budget has a lack of reform initiatives," he said, adding the current state of the banking system and the capital market is not helpful to ensure economic recovery.

Other regulatory institutes, such as the energy regulatory commission, require many reforms, he said.

He stressed political will and good governance to ensure inclusive growth, adding inequality can be reduced by ensuring redistribution of wealth.

Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industries, said the proposal of tax exemptions in some import substitution sectors would help create windows for exports after meeting domestic demands.

But he disapproved additional advance taxes imposed in some sectors, saying such taxes reduce the rhythm of any business.

He called for separate tax policies for different sectors as well as the separation of the authorities that impose tax policies and the one that implement those.

Jashim recommended introducing digital technologies to boost government revenue and reduce taxpayers' hassles.

He said expanding the tax net would reduce the pressure on regular taxpayers. He also proposed setting up tax offices in upazilas.

Lawmaker Barrister Rumeen Farhana said people expected some exceptions in the new budget considering Covid-19 impacts, but those were not met.

She said more than seven crore people are living below the poverty line while half of them are new poor though they have not been recognised by the government. She demanded allocations for them from the social safety net, adding there should be a fresh census to find out the latest poverty rate.

Barrister Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry, said the government lacks budget implementation capacity while increasing the size of the budget without enhancing the capacity of utilisation will not create any result.

Mirza Nurul Ghani Shovon, president of the National Association of Small and Cottage Industries of Bangladesh, said despite the SME sector contributing to about 80% of industrial employments and 23% of the GDP, the government provided a lower amount of stimulus for it.

"The majority amount went to medium enterprises while the cottage, micro, and small industries were deprived," he said.

Professor Mustafizur Rahman, a distinguished fellow at the CPD, said his organisation proposed a cash transfer programme where poor households would get Tk8,000 per month.

Around 1% of the GDP is required to protect the poor for three months, but the government turned down the proposal, he said.

Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services, proposed reducing tariff on data as the internet is being used as the main driver in the software industry.