Lax planning behind fiscal imbalance: Finance Division
The Finance Division has noted that all ministries, departments, and other institutions are currently formulating their budgets using the Integrated Budget and Accounts System, with the budget implementation module fully operational in all sectors. Ministries have also bolstered their capabilities.
There is an imbalance between the income and expenditure of the government due to a lack of proper planning, according to the Finance Division.
Towards the end of the fiscal year, expenditure pressure rises leading to unplanned loans and borrowing costs, which in turn undermine fiscal discipline, the division says.
On Wednesday, the Finance Division issued a circular aimed at addressing this issue, directing various ministries and departments to formulate specific and time-bound plans at the start of the fiscal year to ensure timely implementation of the budget.
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The division has additionally requested budget implementation plans for the current fiscal year of 2023-24 from ministries and departments by 8 October. Furthermore, it has mandated that the budget implementation monitoring report be submitted to the division within one month after the conclusion of each quarter.
To facilitate this process, the division has introduced eight specific forms for the preparation of budget implementation plans and monitoring. Ministries and departments will now be required to utilise these forms for their planning purposes.
The ministries have also been encouraged to strategise their expenditures on a quarterly basis. Furthermore, they have been instructed to develop a distinct plan for the execution of the significant initiatives outlined in the budget.
As per the Finance Division, utility bills for the previous month should be settled by the third week of each month, with appropriate funds allocated accordingly.
The execution of repair and maintenance should commence at the onset of the fiscal year, ensuring a consistent expenditure pattern with similar bills for each quarter. Simultaneously, a procurement plan should be devised for the acquisition and purchase of assets, it said.
The Finance Division has noted that all ministries, departments, and other institutions are currently formulating their budgets using the Integrated Budget and Accounts System, with the budget implementation module fully operational in all sectors. Ministries have also bolstered their capabilities.
However, despite these measures, achieving timely and equitable budget implementation remains a significant challenge.
A report jointly prepared by the Finance Division and the World Bank Dhaka Office indicates that the adoption of the Integrated Budget and Account System is expected to yield savings of around Tk59,804 crore for the country over the next five years.
