Is the surplus exchequer result of healthy management?

‘January-December financial year will help agencies avert the eleventh-hour rush to complete ADP during the wet season’

Staff Correspondent

8 July, 2021 12:00 AM printer

Bangladesh Bank has reported Tk 27.03 billion surplus money in the national exchequer for the first time in the history of Bangladesh.

But economic analysts raised question whether it reflects healthy management of the government finance.

Dr. Mohammed Farashuddin, former governor of Bangladesh Bank, feared that the surplus figure at the national exchequer may shrink sharply after all pending bills are paid.

While some reports suggest the country had posted a huge cash deficit of Tk 44.86 billion in the previous fiscal year.

There are questions as to how the surplus cash can depict the real picture of the economy.

Dr Mohammed Farashuddin told the Daily Sun that the government’s balance sheet could show surplus amount because of the unpaid bills of the works accomplished hurriedly at the end of the financial year. 

“The problem is that 85 percent work of annual development programme is implemented hurriedly in the final months of the fiscal year, like in April, May, June. So, many bills remain pending, which are usually paid after the end of the fiscal year,” he said.

According to him, the financial year in Bangladesh should be from January to December, which would help the officials avert the eleventh-hour rush to complete ADP during the wet season.

Finance Division officials, however, seem to have self-congratulated for the surplus amount that the exchequer has generated.

About the surplus fund shown in the central bank’s report released on Tuesday, a Finance Division official was quoted as saying the healthy exchequer was reflection of the government’s financial management efficiency.

The introduction of the electronic fund transfer (EFT) system and larger budgetary support by the World Bank, ADB and AIIB were also attributed.

The former central bank governor Dr. Farashuddin, however, lauded Finance Minister AHM Mustafa Kamal for his initiative of withdrawing idle funds from autonomous organizations and adding the funds to the national treasury.

This also helps the government’s treasury stay healthy, he said.

He mentioned the case of Bangladesh Petroleum Corporation (BPC) in this regard.

Dr. Farashuddin said BPC should send the surplus money to the government exchequer when the corporation makes profit and generates surplus funds.

He said the fall of global oil prices had helped the BPC earn profits.

“When oil prices dropped on the global market, the government didn’t lower the prices in the local market. This helped the BPC make profit. When they were in loss, the government subsidised. So, when they made profit, they should have sent the surplus money to the government, or the government should have taken it,” the economist said.         The government adds idle funds of 16 autonomous organisations into the national exchequer under Integrated Budget and Accounting System.

The people concerned said the system has enabled the government to shrink its interest payment outlay worth currently around Tk 685.89 billion.

The autonomous bodies include, among others, Bangladesh Rural Electrification Board, National Housing Authority, DESA, DESCO, Bangladesh Jute Mills Corporation, Bangladesh Road Transport Authority, Bangladesh Rural Development Board and Bangladesh Agricultural Development Corporation. Dr. Farashuddin denied the remarks that the government had failed to utilise budget supports on COVID-19 from the international development partners.

He said the government had spent money in the purchase of vaccines and other COVID-19 pandemic-related issues.

The large part, Tk 21.20 billion of the surplus amount at national exchequer was borrowed as budgetary supports from global lenders.

Sales of treasury bills and other bonds totaled Tk 15 billion.

The report suggests that a sum of Tk 9.17 billion was spent at the eleventh hours of the just concluded fiscal year.