The Daily Star, 05 January 2008
In the first three months of the current fiscal year the government has spent more than 20 percent of the total revenue budget for the year but its performance in development expenditure is very poor.
According to the finance ministry’s monthly fiscal position report, during the three months the development expenditure was only 5.4 percent of the budget. According to a report of the Implementation, Monitoring and Evaluation Department of the planning ministry, it was 18 percent during July-November.
Zaid Bakht, research director of Bangladesh Institute of Development Studies (BIDS), said there is nothing to worry about revenue expenditure’s being higher than development expenditure.
The new government will have to immediately take steps to trim the size of development budget to prevent misuse and wastage of resources and increase its implementation, he said.
According to the BIDS report, the revenue expenditure in this fiscal year’s budget has been set at Tk 69,081 crore and the government has spent Tk 12,913 crore in three months, which is 21.9 percent of the budget. Of this, expense on interest payment was 29.3 percent and the second highest expenditure–pay and allowance–25.3 percent.
The government had to borrow excessively–more than Tk 10,000 crore–from banking system last year while the budgetary target was Tk 7,253 crore.
This time the government target for borrowing is Tk 13,498 crore but as of December 15 the government has already borrowed 56 percent or Tk 7,533 crore.
Zaid Bakht said in revenue expenditure there is no scope to cut the pay and allowance and payment of interest on government borrowing. Alongside, the government has to stress on quality development expenditure.
The BIDS research director said the caretaker government has run the country with a small number of advisers and their top priority was holding the parliamentary elections. As a result, ADP implementation was naturally slow. He said when a political government is in power the implementation rate is higher because of pressure from ministers and lawmakers.
The caretaker government implemented the projects taken on political consideration during the rule of the previous political government. The new government should review these projects immediately after taking power to downsize the ADP and cancel unnecessary projects.