Dr. Md. Shairul Mashreque and Dr. M Abul Kashem Mozumder :
Doubtless government has been trying to bolster our economy claiming that Bangladesh is becoming emerging tiger. It is becoming middle-income country in global economy. The state tries its level best to nourish our economy to make it more vibrant and flourishing with micro-industrial development, seven percent growth and massive infrastructural development. At the social level the government endeavors to reduce income poverty, infant mortality and increase nutritional intake.
Nevertheless the daunting challenge is smart implementation of budget meaning a right way of turning public policy into a reality. Such lofty objectives could have been fulfilled by now. We are handicapped by vitiated political environment. There is a lack of good governance. Revenue collection with the dynamic role of NBR deserves mention. Its initiatives are all embracing raising consciousness of the taxpayers to become a recognized honorable citizen with certificate. Tax festival is also arranged for the convenience of the enthusiastic taxpayers. But the inefficiency of tax administration needs to be addressed. “The administrative and management capacity of the taxperson remains a major determinant in deciding the success of any new and automated system, not to speak of such a complex system as the VAT. Awareness building campaign in the form of training, conference, sector wise group consultations for business entities, which are also critically important determinants, have also remained inadequate till now. This is particularly important to make the end users at the periphery areas more comfortable about the new system. The strategy in the areas of regulation and monitoring as regards technical issues concerning the new VAT system are, however, not clear. NBR needs to integrate a number of government and autonomous agencies in the system for information sharing, but their capacity to comply with the system remains a concern.7 Taking cue from the concerns raised during preparation of the enforcement of the law, NBR should frame a comprehensive enforcement plan on an urgent basis, and make a public announcement of this plan prior to enforcement of the VAT law as of 1 July 2017. This will provide all relevant stakeholders including producers and consumers with clear information and guidelines about enforcement of the law. Business entities (which are vested with the responsibility of collecting the VAT from consumers) have voiced their opposition to the uniform VAT rate of 15 per cent on the ground that this was on the high side”.
Even then our economy bears the stamp of poverty. Rural urban disparity has multiplied. The share of the poor and low middle-income groups has shrieked. The skyrocketing prices of essentials hit the poor threatening them to become poorer. Added to it massive corruption and money laundering through alleged financial scam in banking sector contribute to the level of pauperization of the fixed and poor income segments of the population.
Public policy may be defined as rules of laws, code of conduct, a cluster of priorities reflected in national budget or budgetary statement and ‘governmental actions that reflect the attitudes and rules selected for the public. The public interest or public good as expressed in principles that guide the interpretation and enforcement of the law’.
“Policy-making involves both a technical and political process of articulating and matching actors’ goals and means. Policies are thus actions which contain goal(s) and the means to achieve them, however well or poorly identified, justified, articulated and formulated. Probably the best-known, simple and short definition of public policy has been offered by Thomas Dye, ‘anything a government chooses to do or not to do’. While many organizations and actors create policies to which their members must adhere, we focus on ‘public’ policies made by governments that affect and influence every member of a nation-state or a subnational jurisdiction. The ‘actions’ we are concerned with in this case are government decisions to act, or not to act, to change or maintain some aspect of the status quo”.
A budget is a financial plan for a defined period of time, usually a year. It may also include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. Companies, governments, families and other organizations use it to express strategic plans of activities or events in measurable terms. A budget is the sum of money allocated for a particular purpose and the summary of intended expenditures along with proposals for how to meet them. It may include a budget surplus, providing money for use at a future time, or a deficit in which expenses exceed income.
The relationships between budgeting and policy-making are not easy anywhere. Decision-makers in transitional economies face especially tough challenges because they are forced to harmonise the constraints and demands of fiscal and political decision-making at the very time when their support mechanisms and institutions are in a state of total flux. A book containing empirical dimensions tries to draw a connection between the frontier of public policy and frontier of implementation process through budgeting.
The study conducted scanning the experience of the OECD countries and selecting those examples and systems that were most successful and at the same time most immediately relevant to the structural changes still underway in the economies in transition. This dual criterion for the selection of papers and authors was quite naturally extended to all four major areas of the relationship between budgeting and policy-making.
These areas correspond to the four parts of this volume:
a) a comprehensive look at the current state of theory, practice, solutions, trends and outstanding
problems;
b) preparation of policies and budgets, including legislative ratification;
c) implementation, evaluation and control of policies and budgets;
d) a review of two particularly pressing issues: the utilisation of State-controlled enterprises and
the administration of social security schemes.
Development through private sector cannot be left out of equation. Private initiatives ought to be encouraged through budget. “While there is no denying that the causal relationship between policies and private sector investment patterns call for more rigorous and in-depth analysis, there are also other factors including infrastructure, overall business environment and regulatory regime which have important impact on entrepreneurs’ investment decisions. However, the need for better targeting and better deployment of policy tools in countries such as Bangladesh cannot be overemphasized. Most vital point of our economy is escalation of income gap between the low middle/hard core poor class and the rising tycoons plundering resources. Rich is becoming richer and the poor poorer. This a natural order. But some blessed by the corrupt politico-administrative system are becoming rich with the increasing opportunities for unearned income. Fewer initiatives are reported to stem the tide of corruption and malfeasance. Development through smart implementation of budget to improve the state of our economy warrants elimination of corruption in politics and administration. Our budget must be poor and fixed income group friendly encouraging saving with a reasonable rate of interest. Tax on accumulated money out of saving is not a rational policy. They must be brought to an access point to housing policy through real estate development. Those among builders trying to provide houses for the low-income groups should be given rebate or tax holidays.
This is the way things operate in the realm of governance. If priorities couched in budget are implemented by budget every year then even lofty goals of public policy say vision 2021 and SDG may well be reached.
The dream of prosperity cannot come true unless there is an efficient management of implementation. True, the robust scheme of public spending for maintaining macro economic stability and combating global recession with stimulus package is not self-executing without smart execution. There is a need to redynamize tax administration for mobilization of revenues from tax and non-tax source.
Of course the finance minister seeks to chart a new roadmap of implementation with components like strengthening monitoring ADP utilization, PPBS, critical path method (CPM), formation of task force, parliamentary briefing and unified budget to erase artificial dividing line-development and non-development. He also proposed 5-year medium term budget framework (MTBF). This is to ensure that the process of implementation is properly directed for ‘the purpose of achieving definite targets with a specified period of time’
Even then implementation relies heavily on expected flows of funds from external sources and proper utilization of loans and foreign aids. Money should not be spent for the purpose other than public. Banking sectors may sanction loans on productive sectors with a stick adherence to financial discipline to shun default culture. It would not be treated as parsimony if public money is not lavishly spent on unproductive sectors especially on sumptuous ceremonial functions and unnecessary decorations. Better minimize administrative costs as much as possible. The well-oiled conglomerates behind the scene maneuver should realize that global recession may badly hit our economy rendering implementation task unable to produce expected result. So avoid extravaganza.
(Dr. Md. Shairul Mashreque is a retired professor of Chittagong University and Dr. M Abul Kashem Mozumder is Pro-VC, BUP)
