Historical Profile on Budget Regime and Budget Size | 2018-06-14 | daily-sun.com


Historical Profile on Budget Regime and Budget Size

Dr. Mir Obaidur Rahman

    13th June, 2018 10:25:48 printer

Historical Profile on Budget Regime and Budget Size

Dr. Mir Obaidur Rahman

The golden jubilee, the fiftieth anniversary of our independence is in the offing. The country would also attain the status of a developing country from the Least Developing Country [LDC] status in a narrow band. A country develops through investment and the productivity augmentation. Productivity depends on the human capital development and the state of physical infrastructure. The status of human capital development and the physical infrastructure depends on the quality of expenditures generated through various sources of revenue earnings embedded in the annual budget formulated by the Ministry of Finance every year.

Budget formulation and implementation in Bangladesh is now a long history. The country traversed diverse tracks on philosophy of development and tribulations in her way to development.  It is time to look back and discuss the budget formulation at different regimes. The First budget of Bangladesh was given by Tajuddin Ahmed in 1972-73. The size of the budget was Tk. 786 crore. The next two years budget was also presented by Tajudding Ahmed with the size of Tk. 995 crore and Tk. 1084 crore. You may refer this regime as post-independence period when the country was recuperating from the carnages of the Liberation War.

The second phase of budget starts in 1975-76 that continued till the country attained the democratic era in 1990-91 through mass movement. The budget in 1975-76 was given by Azizur Rahman and the last budget before the democratic government was presented by Major General Monem. The four figure budget started with Tajuddin Ahmed in 1974-75 and the last budget in four figures was presented by M. Syeduzzaman in 1987-88, the budget size was Tk. 8,527 crore. The budget size from one year to another in a few cases was very marginal. The budget that M. Syeduzzaman presented during 1986-87 with a cost of Tk. 8,504 crore and in 1987-88 with a cost of 8,527 crore was just Tk.23 crore more and when viewed with inflation, the budget may be  smaller in size from the previous year budget.

The five figures budget was presented by Major Gen Monem in 1988-89  with budget size Tk.10,565 crore and the last five figures budget was presented by AB Mirza Azizul Islam in 2008-09 as finance Advisor of the last caretaker government. The budget size was Tk. 99,962 crore. Though this represents a wide range in budget size, but this 21 years duration budget size presents lot of interesting insights. Those who presented the budget during this regime, some of them held the post of Finance Minister during the subsequent democratic regime. The outstanding exception was M. Syeduzzaman who presented the budget for four consecutive years; 1984-85, 1985-86, 1986-87 and 1987-88. When you review the budget size, you would observe a very minor increase in the total budget size.

Bangladesh entered a democratic enclave with the nationwide election under the First Caretaker Government in 1990. M. Saifur Rahman presented the budget in a row of five years as the Finance Minister of the Bangladesh Nationalist Party. He was finance minister for two terms and presented ten annual budgets. The first tenure ranges from 1991-92 to 1995-96. The second tenure spans from 2003-04 to 2006-07. The intervening gap was filled by SAMS Kibria who presented the budget five times in a row for five years from 1996-97 to 2001-02 as the finance minister of the Bangladesh Awami League. The budget sizes during these fifteen years indeed observe a major linear shift in comparison to the budget of the post-independence and non-democratic regime. During his first tenure, M Saifur Rahman with a budget size of Tk. 17,607 crore in 1992-93 take the budget to the size of TK. 23,170 crore and during the second tenure the climax was Tk. 69,740 crore during 2006-07 from the terminal year budget size Tk. 42,306 crore by SAMS Kibria.  The size of the budget in the first year during the second term of M. Saifur Rahman was Tk. 44,854 crore. We observe very sensible and healthy increment in the successive years both during the BNP and the Awami League tenure.

The structural shift in budget size that we see through the adjective “ambitious” is during the last ten years of the Awami League government. AMA Muhith who spearheaded the budget with over one trillion taka ended his tenure with over four folds increase, as the current budget size is over Tk. 4.6 trillion. This is just 18 per cent of the GDP. The size is benign in comparison to GDP and it is not a massive increase but indeed requires massive management skill in judicious expenditure in overall development of the country specifically with a deficit budget of over Tk. 1.25 trillion. The question is not with the size of the budget but there are lot of issues attached to this budget size that requires genuine scrutiny both by professional economist and intelligentsias in the country.

The nation should show respect to four individuals for their professionalism and sagacity in this arduous journey of budget formulation and implementation. We pay our homage to M Saifur Rahman and SAMS Kibria for their commitment and dedication to this nation. We are also indebted to M Syeduzzman who was the Finance Secretary for several years and presented four annual budgets.  AMA Muhith presented budget twelve times, ten years as the finance minister of the ruling Bangladesh Awami League and two years as the finance minister of the government of President HM Ershad.


The Writer is a Professor of Economics, United International University.