Budget promises continue to remain undelivered

The government managed to spend 76 percent of its budget in fiscal 2015-16, which is in keeping with the past trend of having a sizeable amount of unused funds at the yearend.

Some Tk 225,051 crore was spent last fiscal year against the budget of Tk 295,100 crore, according to data from the Finance Division.

Officials of the finance and planning ministries blame the poor implementation of the development works for the failure to exhaust the budget.

But even then there is incongruity on the statistics of expenditure of the development budget.

Typically, at the end of a fiscal year, the Implementation Monitoring and Evaluation Division or IMED provides data on implementation of the annual development programme.

But the Finance Division provides the real expenditure amount afterwards, which is almost always less than the figure put forward by the IMED.

For instance, ADP expenditure stood at Tk 67,010 crore in fiscal 2015-16, according to data from the Finance Division. But as per IMED data, the ADP expenditure was Tk 83,488 crore.

It is the IMED data that is mostly quoted in government publications.

IMED releases statistics on the basis of data provided by the ministries, whereas the Finance Division prepares the statistics on the basis of the information passed on by the Office of the Comptroller and Auditor General, said a finance ministry official.

To reduce the discrepancy, the Finance Division has taken a number of reform programmes, he added.

But when it comes to non-development expenditure, only the Finance Division releases the statistics.

Non-development expenditure stood at Tk 151,950 crore last fiscal year in contrast to the budget of Tk 184,559 crore.

The non-development expenditure was less as the government's spending on pay and allowances, subsidy and interest payment was lower than anticipated.

In fiscal 2015-16, the government started implementing the new payscale in light of which a big amount was allocated in the original budget for the purpose.

Some Tk 45,153 crore was set aside for pay and allowance but in the end Tk 39,247 crore was used.

Typically, interest payment overshoots its allocation every year but in fiscal 2015-16 it bucked the trend: it stood at Tk 29,448 crore against the allocation of Tk 31,644 crore.

Expenditure on subsidy decreased 15 percent year-on-year and stood at Tk 11,017 crore.

The full allocation of Tk 1,799 crore for banks' recapitalisation was used.

Since both development and non-development expenditure was less last fiscal year, the budget deficit as percentage of gross domestic product fell drastically.

At the end of the fiscal year, the budget deficit stood at 3.1 percent.

For the purpose of deficit financing, the government's bank borrowing fell but borrowing through savings instruments soared.

Bank borrowing stood at Tk 10,613 crore, which is exponentially less than what the government had anticipated at the beginning of the fiscal year. The government originally planned to borrow Tk 38,523 crore from banks.

Borrowing by way of savings instruments stood at Tk 33,813 crore, which overshot the target of Tk 15,000 crore.

Low-cost foreign borrowing stood at Tk 11,138 crore, in contrast to the original target of Tk 32,239 crore.