The public and accountability in budgetary process

by Rashed Al Mahmud Titumir | Published: 00:00, Jun 30,2020

 
 

THE real challenges facing the country today are that incomes are eroding, jobs are insecure, poverty is mounting, inequality is escalating, unemployment is worsening, and control over life is weakening amidst the uncertainties posed by the COVID-19 pandemic. Poverty is expected to rise to 47.43 per cent in case of prolonged economic slowdown, inequality may cross the fault line of 0.5 in the Gini coefficient and unemployment may worsen by more than 3 per cent, as the Unnayan Onneshan estimates.

In the wake of a global pandemic, people expected the budget of the financial year 2020-21 to be people centric. Anticipations regarding its focus on the protection of lives and livelihoods, health care and social protection have been at the core. Besides, they also have waited for a comprehensive roadmap for restoration, recovery and restructuring of the economy. The untold anxieties probing through the minds of people revolve around well-being larger than economic growth itself. The pandemic has brought to the forefront the inquiries into the nature of growth, the mode of achieving the growth and who the growth will cater for.

In response to questions on how economic growth will be financed and revenue will be sourced, the finance minister resonated that the sources of money is a decision that the government would make as the need arises, hinting at an apparent gap in financing plans of the new budget. In the revised form of the budget, on the other hand, the allocation for the annual development programme has been reduced only marginally, despite a prolonged shutdown. The ADP has had a track record of underutilisation sans a splurge in the last quarter of the previous financial year to meet expenditure targets. The last quarter of the previous financial year, however, was stalled by a nationwide shutdown, rendering the ADP allocation for this year more extravagant than before. This necessitates the need for a discussion on the accountability of the government expenditure.

Government expenditure and tax revenue are both disbursed to, and sourced from, the public. The scope to participate and express views in how the large sum of money is to be rationed, however, is a mechanism that is largely out of bounds for the public. Much of the power lies in the hands of the bureaucracy and executive body of the parliament in this regard. This may be the result of several underlying factors, some of which are discussed here.

To start with, Bangladesh is an indirect democracy wherein the public delegates its elected representatives to do its bidding through parliamentary elections. The finance act or the budget is a money bill. The rules of the procedure of the parliament say: ‘No Money Bill can be introduced in parliament except on the recommendation of the president. When a Money Bill is passed in parliament and is presented to the president, he has to assent to it within a period of 15 days…..In the case of a Bill, other than a Money Bill, the president may either assent to it or return it to parliament within 15 days of its presentation to him with a message requesting that one or more of the Bill’s provisions be reconsidered. He may also request the consideration of any amendments specified by him in the message.’  A parliamentarian, therefore, cannot make any proposal without the recommendation of the president, meaning without the recommendation of the prime minister as the president acts on the advice of the prime minister. And a money bill also does not go through the committee process and usual three readings, offering little scope for scrutiny as per stringent procedures. It is permissible to either accept or reject, but not to suggest alterations. That too is not possible as the members cannot vote against their own parties.

Secondly, it is crucial to ensure the right of citizens to access information related to the budget in order to ensure transparency and accountability in the budget management process. For example, there has been no publication of data regarding the pandemic from Bangladesh Bureau of Statistics, neither has the annual economic review been published. Therefore, the context, accounting and economic indicators upon which the budget has been formulated remain clouded. The lapse in financial and budget analysis is particularly evident because of the lack of an autonomous budget office, such as the Congressional Budget Office in the US that may aid the budgetary process by publishing independent estimates of costs and revenues for proposed legislation.

Thirdly, a definite framework for the process of revising the budget is practically non-existent. An increase in the expenses for various sectors or the under-utilisation of budgetary allocations are often left unexplained owing to the absence of a stringent oversight mechanism, with required power vested in the standing committees to ensure accountability. For example, a downsizing of the budget in the revised form has not particularly led to a significant decrease in the allocation for the ADP, despite only a 39.9 per cent utilisation of the ADP budget in the first eight months of the previous fiscal year. More efficient debt management could have been brought about by a streamlining and downscaling of the ADP allocation significantly more than the Tk 9,800 crores that has been debited, in order to allow for a freer fiscal space. The budget also reflects a certain negligence of the vulnerabilities in the banking sector, arising from non-performing loans, withdrawal pressures and subsequent liquidity crisis, and at the same time, one of the striking strategies for the financial and capital market proposed in the budget has been the offered opportunity of sanctioning undisclosed money into the capital market. These initiatives altogether indicate the ubiquitous existence of clientelist preferences that wind up distorting the social welfare motive of the budget.

Fourthly, despite the fact that ‘no tax shall be levied or collected except by, or under, the authority of an act of parliament and no money can be appropriated from the Consolidated Fund except by an act of parliament,’ tax exemptions are levied through the Statutory Regulatory Orders to placate clientelist networks.

Fifth, there is little room for discussion on the importance of various international agreements that may have ramifications for economic performance. Several international organisations have been granted indemnity, releasing their actions from the auspices of accountability.

Finally, there is little scope for oversight on and scrutiny into the budget formulation process itself. The evaluation carried out by the auditor and comptroller general at the end of the year is unequipped to pursue enforcement of accountability outside the premises of recommendations from the parliament. This further necessitates the need for an independent budget office to provide checks and balances to the budgetary management process.

The budgetary management and mechanism of formulation and revision therefore has been inculcating an age-old practice of no analysis, oversight, accountability and critique, often owing to the constitutional limitations, parliamentary procedural ambiguities and absence of required institutions, authorities and powers. Allowing participation, discussion and evaluation of the feasibility and its socio-economic impacts will have ensured a better check-and-balance, making the budget a vivid reflection of the aspirations of the people it is designed to serve.

 

Dr Rashed Al Mahmud Titumir is a professor of economics at the department of development studies at the University of Dhaka, and chairperson of the Dhaka based think-tank, the Unnayan Onneshan.

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