JS should okay supplementary budget before spending: PRI

Dhaka,  Wed,  20 September 2017
Published : 11 Aug 2017, 01:00:48 | Updated : 11 Aug 2017, 15:36:24
printer

JS should okay supplementary budget before spending: PRI

Muhith to pursue autonomy of BBS
FE Report


Supplementary budgets requesting authorisation of additional spending should be placed in the Jatiya Sangsad (JS) before actual spending.

The suggestion was made in a study on fiscal transparency in Bangladesh.

Currently the ministries, divisions or agencies first spend money in addition to their budgetary allocations, and then take approval of the spent money from the parliament.

The local private think-tank Policy Research Institute of Bangladesh (PRI) presented the research paper styled 'Improving fiscal transparency in Bangladesh' at a programme on Thursday. PRI Executive Director Dr Ahsan H Mansur authored the paper.

Finance Minister A M A Muhith was the chief guest of the programme, organised by the PRI at a city hotel.

Deputy chief of mission at US Embassy in Dhaka Joel Reifman joined the function as the special guest.

Former finance secretaries Zakir Ahmed Khan, Siddiqur Rahman and Dr Mohammad Tareq were also present at the dialogue.

Additional Secretary of Finance Division Mohammed Muslim Chowdhury, Executive Director of Institute of Inclusive Finance and Development Dr Mustafa K Mujeri, and former finance secretary Zakir Ahmed Khan were the panellists.

PRI Chairman Dr Zaidi Sattar moderated the function.

Dr Mansur, however, said the draft budget should be intensively scrutinised and vigorously debated along with justified amendments by the legislature.

He suggested such quick interventions for a period of 1-2 years to help Bangladesh improve its fiscal transparency performance.

He also noted that there is no fiscal responsibility law, which can dictate the regular publication of long-term effects of budgets and fiscal activities.

"Bangladesh does not have a legally defined fiscal responsibility law."

Dr Mansur in his paper said the national revenue administration should be legally protected from political directives, ensure tax payment rights, and report regularly to the public on its activities.

He said the national statistics agency should be protected by legislation that grants it technical independence in verifying compilation and publication of official statistics.

"In Bangladesh politicisation of data has been a known practice," he said.

The national statistical agency - Bangladesh Bureau of Statistics (BBS) - is under Ministry of Planning.

"The government may consider making it an independent body, accountable to the parliament," he recommended further.

A M A Muhith said he will pursue the issue of making BBS an autonomous organisation. "This is a good idea to make BBS an autonomous body."

He, however, said during his eight years as the finance minister he never discussed any report prepared by BBS.

As part of transparency in budget execution, the finance minister said the government prepares quarterly reports on budget performances.

The first quarterly report is duly discussed in the parliament, but the second quarterly report is not much discussed. The third quarterly report usually comes just before the budget announcement, so there is little chance for discussion on it.

He added that removal of poverty will help the country to come out from the middle-income stagnancy.

US deputy chief of mission Reifman said greater expertise and fiscal transparency are the most important things for Bangladesh economy. "Fiscal transparency is not only the issue of accounts or technicians, it is a fundamental issue, which has impact on the country's greater economy," he also said.

Bangladesh is going through a transition, and it is going to be a middle-income country by 2021. The country will need higher productivity and innovation to attain sustainable growth, he commented.

"It is possible through better management, and only fiscal transparency can ensure such management," the US deputy chief said.

Mr Reifman, who is the chargé d'affaires, said Bangladesh has made tremendous progress since its independence in 1971. It now has the second largest garment sector in the world.

"The US is proud to be a partner of its progress," he added.

Speaking at the function, PRI vice chairman Dr Sadiq Ahmed said there is major concern relating to the treasury's contingent liabilities emerging from the operations of the state-owned public non-financial and financial enterprises.

"The last time I looked at the accounts, the contingent liability of the non-financial SOEs amounted to Tk 3,254 billion in the fiscal year (FY) 2014, which was 24 per cent of the GDP," he said.

Similarly, the value of non-performing loans of public banks in that year was Tk 308 billion, which was another 1.7 per cent of the GDP.

"The point is while these contingent liabilities are a huge challenge for the treasury, there is no analysis on this issue in the budget."

He further said it is very important to have a proper database and analysis of the financial flows between the treasury and the SOEs covering all financial transactions, including subsidies, equities, loan write-offs, debt servicing, and investment financing etc.

Muslim Chowdhury said the government has taken moves to upgrade the existing classification system. "We've reviewed the classification, and there will be application of it from the next FY."

He said there are some reforms, initiated for speedy pension payments and other such type of payments, making the government machinery easier and more transparent.

 Renowned economist Dr S R Osmani said fiscal transparency is important from two perspectives - for conducting research and for citizens.

He said there are pre-budget consultations with different stakeholders, but there is no record of these, and they are unaware of their implications in the budget.

The research paper suggested that all mega infrastructure contracts should be made transparent and publicly available.

Detailed breakdown of subsidies to public corporations should be explicitly documented with the budget documents, it opined.

The production sharing contracts (PSCs), signed between the international corporations in the resources sector and the government are not published for public access, the paper mentioned.

jasimharoon@yahoo.com
ADDRESS
Editor : A.H.M Moazzem Hossain
Published by the Editor for International Publications Limited from Tropicana Tower (4th floor), 45, Topkhana Road, GPO Box : 2526 Dhaka- 1000 and printed by him from City Publishing House Ltd., 1 RK Mission Road, Dhaka-1000.
Telephone : PABX : 9553550 (Hunting), 9513814, 7172017 and 7172012 Fax : 880-2-9567049
Email : editor@thefinancialexpress-bd.com, fexpress68@gmail.com
Copyright © 2017. All rights reserved
Powered by : orangebdlogo
close