The government has admitted that there is an imbalance between the income and expenditure due to improper planning of ministries and divisions, an official of the finance ministry said.
The main reason for this is the lack of proper planning for revenue collection and government spending. In a circular, the Finance Division under the finance ministry has admitted its failure. The ministry also acknowledged that the expenditure was staggering towards the end of the financial year.
Besides, they have also taken responsibility for unplanned bank loans.
And the finance division thinks that the budget discipline is being ruined. The Finance Division under the finance ministry recently issued a circular on the policy on the formulation and implementation of the budget implementation plan. This is the first failure of the policy, the reasons for unplanned borrowing, various issues including budget discipline have been highlighted.
According to the policy, some of the activities announced in the last three financial years are still being implemented. Apart from that, some activities have also been announced in the budget of the 2020-21 fiscal year. It is necessary to take a precise and timely plan for the smooth implementation of these activities in a timely manner.
Referring to the fall in expenditure at the end of the financial year, it said that the experience of the past years shows that the budget implementation of various ministries / departments and other institutions has been slow in the first half of the financial year. Just as there has been a slowdown in revenue collection as per the targets set in the budget at the beginning of the financial year, there has also been a slowdown in expenditure in areas other than salaries and allowances. However, at the end of the financial year, various utility bills were paid, repaired, stored, constructed, and steps were taken to procure accessories. As a result, in many cases, it is not possible to ensure the quality of government expenditure. Instead, at the end of the year, the government has to take responsibility for unplanned loans. As a result, budget discipline cannot be ensured.
Admitting the failure of the government to have a proper planning for revenue and expenditure, the circular said that the main reason for the imbalance between the government's revenue and expenditure is the lack of proper planning in terms of revenue collection and government spending.
If it is possible to take plan in advance and implement the budget approved by the
parliament in a timely manner, it will be possible to avoid unplanned government debt and reduce the debt related expenditure significantly.
The circular further said that in view of these issues, a budget implementation plan should be adopted at the beginning of the financial year to ensure proper execution of the budget of each ministry/department and other institutions; its proper implementation and budget monitoring should be supervised regularly.
Finance Division has generated various forms with policies and procedures so that different ministries / departments can take a proper plan for budget implementation.
Policies to be followed in budget implementation: Among the activities announced in the budget from FY 2017-18 to FY 2019-20 which are still under implementation and planning to ensure execution of the activities announced in the budget for FY 2020-21. Later, the latest progress report will be sent to the finance department on a quarterly basis.
Mentioning that quarterly targets should be set for revenue collection, the policy states that quarterly revenue collection targets should be set on the basis of targets set against different sectors in the budget for 2020-21. If there is a record of the seasonal decline in revenue collection in any sector, it is necessary to set revenue collection targets against the relevant items.
In the case of expenditure, it has been said that in the case of sectors where salaries and allowances are allocated/spent proportionately, the quarterly expenditure target should be fixed at a proportional rate. In addition, each ministry has to monitor the implementation of the budget.
Meanwhile, the country has seen the lowest implementation of the Annual Development Programme (ADP) in the last decade during the first 11 months of any outgoing fiscal year, with the percentage being slightly over 57 percent. According to a review report of the planning ministry's Implementation Monitoring and Evaluation Department (IMED), the ADP implementation rate in the country never fell below 62 percent during the first 11 months of any fiscal year since 2010-11, while it reached a maximum of 72 percent.
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