Budget implementation in the face of obstacles.
When Dr. Muhammad Yunus took over as the head of the interim government. He could not restore stability in the macroeconomic situation even after three months of taking office. The Finance Department believes that administrative instability still continues and several officials involved in budget implementation are still not cooperating with the interim government.
Analysts said that the revenue sector has come under pressure due to the country’s political instability. Mobilizing the financial sector has become a difficult challenge for the interim government. The National Board of Revenue (NBR) said that the revenue deficit in the first four months of the current fiscal year (July-October) was Tk 30,768 crore. On the one hand, the pressure to repay foreign loans and on the other hand, the ongoing dollar crisis has further weakened the economic situation.
It is known that only 7.90 percent of the Annual Development Program (ADP) allocation was spent in the first four months (July-October) of the 2024-25 fiscal year. This rate is the lowest in the last 15 fiscal years. Last year, 11.54 percent of the total allocation of ADP was spent during the same period. According to the IMED report, ADP implementation amounted to 21,978.17 crore taka in the first four months, while 8,672.87 crore taka was spent in October. The implementation rate was 3.15 percent, which was 4.03 percent in October last year.
The Finance Department has informed that the pace of ADP implementation has slowed down due to political unrest. In this situation, new instructions have been issued to increase the pace of budget implementation. The instructions include marginal-based income-expenditure planning and implementation and adopting new strategies for budget implementation. These instructions were given in a circular titled ‘Preparation of Budget Implementation Plan and Monitoring Implementation Progress’ issued by the Finance Department recently.
The Finance Department has issued new instructions for budget revision. These include limited revisions in the expenditure shown in the main budget and reducing development budget and revenue collection. On June 6, former Finance Minister Abul Hasan Mahmud Ali announced a budget of Tk 797,000 crore in the National Parliament for the 2024-25 fiscal year. The total deficit of this budget was Tk 256,000 crore, which came into effect from July 1. However, the situation changed after the fall of the Awami League government on August 5.
The Finance Department has given 13-point instructions in formulating the revised budget. These include limiting the number of projects, prioritizing development projects, and not including any unallocated projects in the budget. The revised estimates of the operating budget have been asked to be submitted to the relevant sub-divisions of the Finance Department by November 28. As a result, initiatives have been taken to revise the budget by cutting and trimming it in consideration of the overall aspects.
It is learned that the budget for the 2024-25 fiscal year was announced by prioritizing inflation control. The current interim government has also taken initiatives to revise the budget by prioritizing inflation control, so that the economy can be stable and inflationary pressures can be reduced.
Planning Advisor Dr. Wahid Uddin Mahmud said that the implementation of the development budget left by the previous government has been less than last time and now there is a need to appoint a new project director.
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