Published in The Daily Star on Monday, 1 June 2015.
Macro Mirror
On the eve of the budget
Fahmida Khatun
It is budget time once again. This is the time to do math on national expenditures and income afresh. This is the most important exercise of the Ministry of Finance (MoF) to get the numbers right through which the government manages the economy. It is also crucial for us – the citizens of the country, since revenue mobilisation efforts and expenditures undertaken by the government have implications for each one of us.
Despite such critical roles, the excitement over budget has probably tapered a bit among a large section of people over the years. There was a time when the budget was awaited eagerly by many. The recent lack of interest is not only due to extensive media coverage on budget much before it is announced formally, but also because people nowadays know that a new budget mostly means higher cost of living for them. Similarly, the sentiment on the street over budget proposals is also nearly non-existent due to weak political opposition and its lack of interest in the subject. Regrettably, they are also inactive in making alternative suggestions during the pre-budget period, except through late night talk shows on private TV channels.
Like past years, the budget for FY2015-16 will not be any surprise as some key numbers and many proposals are already in the air. In a nutshell, with an outlay of Tk 300,000 crore, the Annual Development Programme of Tk 97,000 crore and the budget deficit below five percent, the government intends to reinvigorate growth, raise tax-GDP ratio, boost investment and create employment, among other goals.
Veering away from numbers, we may ponder awhile over a few aspects of the budget formulation process that often attract less attention as we become engrossed mostly in figures and measures.
The MoF starts the process of budget preparation as early as December, if not before, to finalise it by June. While doing the tedious number crunching, they also try to hear the views of stakeholders – professionals, business community, non-government sector and experts through consultation meetings. Stakeholders, at these meetings, inundate the Finance Minister (FM) with suggestions and expectations. I have high regard for the hardworking officials in the MoF who diligently take notes during these meetings. I also have empathy for the honourable minister who listens to the long wish lists of various individuals for a few hours and meticulously responds to each one of them. For the last few years, I have had the opportunity to attend these consultation meetings and have therefore seen for myself the sincerity of the MoF to give a patient hearing to the comments and of the participants to express their ideas.
But we all know by now how much of those suggestions are reflected in the budget. Without being frustrated, the right spirit should be to look at these meetings strictly as platforms for exchanging ideas. If thought otherwise, then it shows that we probably haven’t understood the mechanism of budget preparation in a political setting which is guided by the philosophy of the party in power. So be it. A democratically elected government gains the moral right to reflect its philosophy through economic policies. But how much awareness exists on budgetary issues among the political leaders themselves is a point to be raised in this connection. How many members of the parliament are willing to go through budget proposals and challenge the FM on allocations, expenditures, priorities and implementation? They are elected by voters of their respective constituencies on the basis of their commitments that they would flag peoples’ concerns and bring money from the government to solve their problems.
To their credit, many MPs do work toward fulfilling their commitments. After all, they have to ask for votes during elections and showcase their achievements. So they would submit their requirements to the MoF and try hard to get it disbursed. But budget has a greater role to play than merely building local roads, culverts, schools and hospitals. Besides, the national budget is also supposed to go beyond one year and should have a vision on how the economy should perform in the medium term. What strategies are needed for higher growth and more jobs, how inflation can be contained, what type of investment is needed, how resources would be mobilised, and many more such issues have to be addressed through budgetary measures. Unfortunately, it is not only the lack of interest, but also the capacity of political leaders to carry out constructive debates on these issues within and outside the parliament.
Coming back to the consultation process, despite good intentions of the MoF, these are utterly underrepresented. The voice of people at the grassroots level is totally absent in this exercise. Understandably, the MoF alone cannot organise that many consultations across the country. This is an area where lawmakers can come forward. The government has floated the idea of a district budget, without much success though. To make this initiative effective, suggestions have to come from the local level, not from the centre. The plan for revenue generation, expenditures and allocation has to be originated from those for whom the budget is prepared. Let the burden of expectations of people on the budget also befall on the shoulders of each and every public representative. Let the local leaders also be responsible for improving the accountability of budget implementation.
The writer is Research Director at CPD, currently a Visiting Scholar at the Earth Institute, Columbia University, New York.