Only 37% of our budget is transparent

The International Budget Partnership (IBP), a non-profit US organisation, analyses national budgets on the basis of Open Budget Surveys (OBS). IBP studies budget documents and processes of more than one hundred countries on a biennial basis.

They assess the formal opportunities offered to the public for meaningful participation in the different stages of the budget process. The study evaluates how openly governments share budget information, encourage public participation to strengthen accountability, and facilitate oversight by institutions such as legislatures and audit offices.

The Controller and Auditor General (CAG) of Bangladesh reviewed the government's accounts, but its reports did not contain substantive findings and were not made publicly available within a reasonable period. The audit of CAG is not of international standards of independence. Recently, a new draft law, "The Public Audit Ordinance 2025," seems like old wine in a new bottle.

IBP examines the practices of the government's executive, the legislature, and the CAG using 18 equally weighted indicators, aligned with the Global Initiative for Fiscal Transparency's Principles of Public Participation in Fiscal Policies.

The Open Budget Survey 2023 assessed 125 countries, which are home to 95% of the world's population and include budgets totalling more than $33.5 trillion in spending in Fiscal Year 2022.

In the latest 2023 Open Budget Survey, Bangladesh scored 37 out of 100, a slight increase from its 2021 score. This score is below the global average score of 45. A transparency score of 61 or above indicates that a country is likely to publish enough material to support informed public debate on the budget.

Bangladesh's score was 56 in 2015, 41 in 2017 and 36 in 2019, marking a gradual decrease in transparency with a slight improvement in the 2023 survey due to some initiatives:

(a) Public Availability: The government has made its executive budget proposal and enacted budget publicly available, including online.

(b) Information Reliability: Information within the budget is generally considered reliable.

(c) Debt Information: Information on debt obligations is also publicly available.

(d) Medium-Term Budgetary Frameworks (MTBF): The government has increased information provided in the Executive's Budget Proposal by publishing the Medium-Term Budgetary Frameworks (MTBF) on time.

These indicate that while there has been some progress in making budget information publicly available, there is a need for improvement in ensuring full disclosure and promoting public participation in the budget process.

The US government also studies the transparency of budgets of different countries. The 2024 Fiscal Transparency Report of the US government finds that Bangladesh did not meet the minimum requirements of fiscal transparency between 1 January and 31 December 2023.

The US-sponsored report mentioned that although the Bangladesh government made its executive budget proposal and enacted budget publicly available, including online, it did not make its end-of-year report publicly available within a reasonable period.

The budget documents were not prepared according to internationally accepted principles, although information in the budget was considered generally reliable.

Information on debt obligations was publicly available. Budget documents provided a reasonably complete picture of the government's planned expenditures and revenue, including natural resource revenues. However, the government did not break down expenditures to support executive offices.

The publicly available budget documents included financial allocations to and earnings from state-owned enterprises.

The government specified in law or regulation and appeared to follow in practice the criteria and procedures for awarding natural resource extraction contracts and licenses. Basic information on natural resource extraction awards was not consistently made publicly available.

According to the US government, Bangladesh's fiscal transparency would be improved by:

• Making its end-of-year report publicly available within a reasonable period;

• Preparing budget documents according to internationally accepted principles;

• Breaking down expenditure to support executive offices in the budget;

• Ensuring the supreme audit institution meets international standards of independence and has sufficient resources;

• Publishing timely audit reports that contain substantive findings, recommendations, and narratives; and

• Making basic information about natural resource extraction awards publicly available.

According to the IBP study, in Bangladesh, a pre-budget statement is not published. The pre-budget statement can encourage civil society to get involved in the budget process early and influence policy plans before detailed funding decisions are made. To further improve, Bangladesh should ensure timely online publication of essential documents, such as the pre-budget statement, in-year reports, and a single, comprehensive year-end report.

Bangladesh should prioritise the following actions to improve budget transparency: Publish the Pre-Budget Statement, In-Year Reports, Year-End Report and Audit Report online in a timely manner. Prioritise the publication of a single, comprehensive Year-End Report, as information is currently incomplete and spread across multiple documents. This Year-End Report should be published within one year of the end of the reporting period.

Produce and publish the Mid-Year Review online in a timely manner.

For a half-year quarterly report to qualify as Mid-Year Review, it should include macroeconomic and fiscal forecasts for the remainder of the year, as well as revised and updated estimates for revenues and expenditures. Improve the comprehensiveness of the Citizens Budget and Enacted Budget. Ensure consistent publication of the Executive's Budget Proposal (Medium-Term Budgetary Frameworks) every year to avoid volatility.

Bangladesh's Jatiya Sangsad provides limited oversight during the planning stage of the budget cycle and weak oversight during the implementation stage. To improve oversight, the following actions should be prioritised: The Executive's Budget Proposal should be submitted to legislators at least two months before the start of the budget year. Parliamentary committees should examine the Executive's Budget Proposal and publish reports with their analysis online. A Parliamentary committee should examine the implementation of the in-year budget and publish reports with their findings online.

Bangladesh does not have an Independent Fiscal Institution (IFI). IFIs are increasingly recognised as valuable independent and nonpartisan information providers to the Executive and/or Parliament during the budget process. An IFI is a non-partisan public body, other than the central bank, government or parliament, aimed at promoting sustainable public finances through various functions, including monitoring compliance with fiscal rules, production or endorsement of macroeconomic forecasts for the budget, and/or advising the government on fiscal policy matters. These institutions are primarily financed by public funds and are functionally independent vis-à-vis fiscal authorities.

Bangladesh's budget is prepared by the Ministry of Finance, and the tax-related part is prepared by the National Board of Revenue (NBR) and the Finance Act. The act and budget speech of the Finance Minister are prepared and printed from the government press ahead of submission to the Parliament, usually on the first Thursday of June. The printing of the documents is reportedly completed by the month of May at the latest. The financial year starts from 1 July of each year.

On the day of presentation of the budget, the cabinet approves the Finance Act and budget speech of the Finance Minister (printed earlier), and then the Honourable President gives consent to the bill for submission to the Parliament. The Honourable members of Parliament receive the 'secretly' printed copies of these documents on the desk of the Parliament Hall. The entire process is non-transparent, and civil society and members of Parliament are excluded from the process of preparation of budget documents, as well as other stakeholders and civil society.

M S Siddiqui is the CEO of Bangla Chemical. He is a former Non-Government Adviser at the Bangladesh Competition Commission and legal economist. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.