UNB, Dhaka :
Unnayan Onneshan (UO), a multidisciplinary think tank, called for taking a prudent fiscal management strategy in dealing with potential economic risks and vulnerabilities in the year ahead.
The UO in its pre-budget issue of Bangladesh Economic Update, identifying the major economic challenges as regards the national budget 2017-18, noted that waning capacity of the authority in
implementing the budget is looming large.
The research organisation urged adoption of a medium-term strategy, encompassing employment enhancement and skill development programs, expansion of the tax base through higher revenue from income tax than from VAT, institutional reform in financial sector, increased private investment through improved business confidence, effective harmonisation of macroeconomic policies, and development of a functional social security system.
Both the collection of revenue and implementation of expenditure, especially Annual Development Program (ADP), have fallen short of target in the current fiscal year, it said.
The status of budget implementation is on the decline since FY 2010-11. Of the total budget outlay, 97.05 percent was implemented in FY 2010-11, whereas the rate subsequently decreased to 93.18 percent, 90.76 percent, 84.59 percent, and 81.59 percent in FY 2011-12, FY 2012-13, FY 2013-14, and FY 2014-15 respectively.
In terms of the current year’s status, the research organisation shows that only 33.7 percent of the total government expenditure has been implemented during the first six months of FY 2016-17.
Meanwhile, the collection of tax revenue lags far behind the target set in the budget 2016-17.
Taking account of unsatisfactory implementation of government expenditure, the research organisation evinces that the total government expenditure has stood at Tk 1,14,730 cr during the first half and total ADP stood at 65,083 cr during the first eight months of FY 2016-17 against the whole fiscal year’s target of Tk 3,40,605 cr and Tk 1,10,700 cr respectively.
In terms of fiscal deficit, the think tank finds that overall fiscal deficit stood at Tk 3,910 cr during second quarter of the current fiscal year compared to Tk 2,300 cr in the corresponding period of the previous fiscal year.
In the first seven months of the current fiscal year, total foreign aid decreased to USD1,464.88 m from USD 1,754.92 m in the corresponding period of FY 2015-16, a 16.53 percent decline, due to a substantial decline in grants.
Pointing out the declining inflows of remittance, the research organisation shows that remittance receipts decreased by 16.03 percent during the July-April period of FY 2016-17 and stood at USD 10,287.23 m compared to USD 12,250.83 m in the corresponding period of the previous fiscal year.
Pointing to the fact that Bangladesh lags behind its South Asian counterparts in social sector spending, the think tank expresses concern over inadequate development expenditure on health, education, and social security and welfare, and calls for channeling adequate resources into social sectors that give particular impetus to the improvement in human development.
Unnayan Onneshan (UO), a multidisciplinary think tank, called for taking a prudent fiscal management strategy in dealing with potential economic risks and vulnerabilities in the year ahead.
The UO in its pre-budget issue of Bangladesh Economic Update, identifying the major economic challenges as regards the national budget 2017-18, noted that waning capacity of the authority in
implementing the budget is looming large.
The research organisation urged adoption of a medium-term strategy, encompassing employment enhancement and skill development programs, expansion of the tax base through higher revenue from income tax than from VAT, institutional reform in financial sector, increased private investment through improved business confidence, effective harmonisation of macroeconomic policies, and development of a functional social security system.
Both the collection of revenue and implementation of expenditure, especially Annual Development Program (ADP), have fallen short of target in the current fiscal year, it said.
The status of budget implementation is on the decline since FY 2010-11. Of the total budget outlay, 97.05 percent was implemented in FY 2010-11, whereas the rate subsequently decreased to 93.18 percent, 90.76 percent, 84.59 percent, and 81.59 percent in FY 2011-12, FY 2012-13, FY 2013-14, and FY 2014-15 respectively.
In terms of the current year’s status, the research organisation shows that only 33.7 percent of the total government expenditure has been implemented during the first six months of FY 2016-17.
Meanwhile, the collection of tax revenue lags far behind the target set in the budget 2016-17.
Taking account of unsatisfactory implementation of government expenditure, the research organisation evinces that the total government expenditure has stood at Tk 1,14,730 cr during the first half and total ADP stood at 65,083 cr during the first eight months of FY 2016-17 against the whole fiscal year’s target of Tk 3,40,605 cr and Tk 1,10,700 cr respectively.
In terms of fiscal deficit, the think tank finds that overall fiscal deficit stood at Tk 3,910 cr during second quarter of the current fiscal year compared to Tk 2,300 cr in the corresponding period of the previous fiscal year.
In the first seven months of the current fiscal year, total foreign aid decreased to USD1,464.88 m from USD 1,754.92 m in the corresponding period of FY 2015-16, a 16.53 percent decline, due to a substantial decline in grants.
Pointing out the declining inflows of remittance, the research organisation shows that remittance receipts decreased by 16.03 percent during the July-April period of FY 2016-17 and stood at USD 10,287.23 m compared to USD 12,250.83 m in the corresponding period of the previous fiscal year.
Pointing to the fact that Bangladesh lags behind its South Asian counterparts in social sector spending, the think tank expresses concern over inadequate development expenditure on health, education, and social security and welfare, and calls for channeling adequate resources into social sectors that give particular impetus to the improvement in human development.
