Bureaucracy's incapacity affects budget execution

Bangladesh's budget-execution capacity still stays stymied despite government spending of millions of dollars annually for improving implementation capacity of the civil servants, sources said Tuesday.

The low public-spending capacity in public works has placed Bangladesh on the lowest rung of an index in the public investment-GDP ratio among the South Asian nations.

Records show the government system has never been able to implement cent per cent of its budget over the last few decades.

An FE analysis has found government's budget expenditure hovering around 81 per cent to 85 per cent of the outlay in the last one decade.

Analysts say a "lack of accountability of the civil servants and inefficient government system" are the major reasons behind the sloth.

The FE analysis shows that in FY2014-15, the government spent 82 per cent of its national budget while 81.61 per cent in FY2016.

Similarly, the authorities couldn't improve on budget-execution capacity in subsequent years, too, as it spent 83.49 per cent in FY2017, 85.38 per cent in FY2018, 85.65 per cent in FY2019, 80.75 per cent in FY2020, 81 per cent in FY2021, 85.85 per cent of the budget outlay in 2022, the Ministry of Finance (MoF) data show.

In the last FY, 2023, the government spent Tk 5.758 trillion or 84.93 per cent of the total Tk 6.78-trillion worth of original allocation.

Meanwhile, public expenditure in Bangladesh is seen as one of the lowest in South Asian nations, in proportion to GDP or gross domestic product.

Government investment is about 15 per cent of the country's GDP, on average, in public expenditure per annum.

In the current FY2024, the government has taken a target to spend 15.2 per cent of the GDP for the country's development works.

In the last fiscal, the public expenditure in the country was 14.9 per cent of the GDP, while it was 13.1 per cent in FY2022, 13 per cent each in 2021 and FY2020, 13.3 per cent in FY2019, 12.2 per cent in FY2018 and 11.6 per cent in FY2017.

Policy Exchange Bangladesh CEO Dr Masrur Reaz told the FE that lack of human-resource capacity as well as inefficient and complex government mechanisms and system are the key reasons for the failure in full budget execution.

"I think there is a lacking of sophisticated human resources management in the civil service which is affecting public expenditure almost every year," he says.