DELIVERING ON BUDGET FY2009‐10: A SET OF IMPLEMENTATION ISSUES

Author: 
Debapriya Bhattacharya
Md Ashiq Iqbal
Towfiqul Islam Khan
Description: 
Occasional Paper: 83
JEL codes: 
Organisation: 
Abstract: 
The newly elected government proposed its first budget on 11 June 2009 with a view to support a trajectory of moderate growth, reduced poverty through employment generation and expansion of safety nets, low price level and tackle the impact of the global financial crisis. The Centre for Policy Dialogue (CPD) in its budget reaction pointed out that addressing these objectives will entail designing of a set of appropriate budgetary measures, but will depend much more on the efficacy of their delivery (CPD 2009a). Furthermore, such delivery will need a coherent, coordinated, consistent and committed participation of the total government machinery and all other development actors and stakeholders. It was encouraging to see that the Finance Minister publicly agreed with the analysts that implementation of the budget would be the most important challenge. In his postbudget press briefing on 12 June 2009, the Finance Minister stated: While drawing up the budget, we knew its execution was going to pose a huge challenge (The Daily Star 2009). In this context the present study seeks to facilitate an early kickoff of budget implementation in FY200910 and to complement the continuing monitoring process by the government. The study is based on analysis of secondary data, government policy documents and media reports. Interviews with the knowledgeable people were also carried out to generate insights. Along with selective econometric exercise, academic literature was reviewed to strengthen the analysis. Promoting economic growth is the primary objective of the budget implementation; conversely growth itself is a key determinant of successful implementation of budget. In this context, the paper sets off by exploring the growth prospect for FY200910 and its linkages with implementation of the budget. Resource mobilisation is one of the two pillars of a budgetary framework; subsequent two sections, thus, highlight the issues related to revenue mobilisation from domestic source and foreign assistance inflow. On the expenditure side, a select set of expenditure issues relating to the revenue expenditures have been examined, besides reviewing the challenges of annual development plan (ADP) delivery. As mainstreaming of the publicprivate partnership (PPP) has been one of the distinguishing features of the budget, a separate section has been devoted to the theme. The penultimate section of the paper brings the resource and expenditure sides together and discusses the issues relating to budget deficit and its financing. The paper then rounds up with a set of possible scenarios along with a few concluding observations.