Published in The Asia Age on Thursday, 2 June 2016
Utilization of funds is key, not amount
Executive Director of the Centre for Policy Dialogue (CPD) Prof Mustafizur Rahman has emphasized enhancing institutional capacity and establishing good governance to implement the budget for the 2016-17 fiscal. Finance Minister A.M.A. Muhith is expected to place a proposed Tk 340,600 crore budget in Parliament on Thursday. “We need to concentrate on implementation of the budget through enhancing the institutional capacity of different agencies for revenue collection, budgetary expenditure, and resource mobilization,” Rahman told reporters. The noted economist said unless the prescription is followed, the targets will prove unachievable and the budget will need to be revised downwards.
Prof. Rahman however said the upcoming budget size over Tk 340,000 crore should not be considered ‘big’, in view of the current economic situation, population size and socio-economic challenges facing Bangladesh. “It is less than 20 percent of the country’s GDP, whereas it is often 30-35 percent in many developing and developed countries. So the size of the budget is not that high,” he said.
Bangladesh is in need of “mega infrastructures” to enhance its business competitiveness, according to Dr Rahman. “Bangladesh needs many types of investment. So, the size of our budget is not big to my consideration.”The CPD Executive Director mentioned a number of challenges in both resource mobilization and expenditure. In terms of resource mobilization, he said the challenges will lie in attaining the target of VAT collection, preventing tax evasion through plugging leakages and loopholes in collection of internal resources, widening the direct tax net, exploiting digitalization and preventing illicit financial outflows. In case of expenditure, he said the major challenges will be to enable smart financing and allocative efficiency in terms of both revenue expenditure and development expenditure (ADP), establishing good governance, and implementing projects in time avoiding cost escalation.