The International Chamber of Commerce-Bangladesh yesterday stressed that efficient implementation of the national budget can drive economic growth.
In an editorial of its news bulletin, ICCB said questions surface over the quality of projects selected for the annual development programme in the national budget and the capacity of the executing agencies. Political priorities outplay development requirement in project selections, the chamber said.
“Besides, in every third quarter of a financial year, the ADP is invariably downsized due to poor project selection and rate of execution. There is always a rush during the last quarter for completion of many projects, taking a toll on their quality.”
One of the major reasons, as sighted by experts, is the disbursement of fund by the finance ministry as well as by the development partners, ICCB said.
“This is evident from the fact that during last fiscal year, several ministries have surrendered 12 percent or the total allocations of foreign funds in 37 projects. Besides, the government has slashed the just concluded ADP by more than Tk 3,000 crore,” it said.
To avoid such a situation, the finance ministry could ensure that concerned ministries or agencies are immediately provided with necessary fund (at least 25 percent or so) within the first quarter of the fiscal year and the balance in a staggered manner, it said. “Similarly, all out efforts should be made to have the fund available from the development partners at the same time.”
“One, therefore, needs to look into the whole mechanism of project selection, monitoring and implementation,” ICCB said.
“It is always seen that during the last two to three months of each fiscal year, there are seminars, dialogues and talk shows, covering topics such as the size of the budget, tax ceiling, provision for tax holiday, whitening of black money and lot of other things. But how much of the suggestions made are actually reflected or adopted in the budget is a matter to be analysed. Once the Budget is approved, talking shop is over.”
According to the chamber, the National Board of Revenue should be congratulated for increasing the revenue collection by almost 27 percent more than the last fiscal year. “The government could easily meet much of the deficit by consolidating its efforts in increasing revenue collections and by settling huge long outstanding tax and custom cases instead of borrowing from commercial banks and thus help banks to provide much needed loan to the private sectors for investment,” ICCB added.
The budget for fiscal 2012 sets a spurring 7 percent growth target with a check to runaway inflation. Even though experts have warned that the ambitious growth target will be difficult to attain, the businesses feel that against a 6.7 percent growth in fiscal 2011, the growth target is achievable with political stability and all out efforts by both public and private sectors.
An increase of 26 percent is definitely ambitious and big, the chamber said. “However, the business leaders opined that to achieve a higher growth, a bigger target and, of course, selection of the right kind of projects are needed with ensuring timely efficacious implementation and close monitoring.”
The budget is for the benefit of the people and for the taxpayers. Therefore, it is high time that the budget preparation mechanism should be revisited and steps initiated forthwith for the selection of projects for inclusion in the next ADP and lining up of necessary funds from the development partners, ICCB said.
Priorities need to be given to selection of projects in ADP for sustained development growth. Smaller and routine projects could be included in the revenue budget. In preparation, selection and execution of projects, private sector should be included along with public sector, rather than the present practice of occasional consultation with the private sector.
“Why not the political government, during the first year of taking over, draws up and present a four-year perspective budget covering their tenure, have it approved and reviewed yearly by parliament. Such a mechanism is likely to be more beneficial and the people could better assess the performance/achievement of a government.”