expenditure
Govt spending on public servants is to rise next fiscal
Although the government has shrunk the percentage of expenditure on pay and allowances of the public servants against the total budget in the running fiscal, it will be back from fiscal 2022-23.
Likewise, the government spending on goods and services will see slight slowdown in the next fiscal, but witness rise from fiscal 2022-23.
According to an official document, the projection of expenditure on pay and allowances of the public servants is 12.4 percent against the total budget, which is Tk 814.3 billion, while it will be 12.5 percent, which is Tk 925.2 billion.
Expenditure on Pay and Allowances was 13.8 percent of the total budget in 2014-15 fiscal, which was Tk 288.2 billion.
Also read: Govt focuses on less current expenditure and increased capital spending: official document
However, the document stated that a little upswing was noticed in 2015-16 (16.7 percent, which was Tk 400.5 billion) that continued till 2016-17 fiscal (18.2 percent which was Tk 490.4 billion) due to the introduction of a new pay scale by the government.
It was reduced to 14.8 percent (Tk 478.5 billion) and 13.6 percent (Tk 534 billion) of total expenditure during fiscal 2017-18 and fiscal 2018-19.
Likewise, it has further been reduced to 12.2 percent which is Tk 656.1 billion in the revised budget of 2020-21 fiscal while it was 12.7 percent or Tk 569 billion.
It is expected to remain at the same level in the medium term (2023-24 fiscal).
In the fiscal 2021-22 expenditure in pay and allowances is 11.8 percent of the total budget, which is Tk 713.5 billion.
The document said that the expenditure on goods and services as a percentage of total expenditure remained around 7 percent during fiscal 2016-17 to fiscal 2019-20.
In 2015-16 fiscal and 2016-17 fiscal it was 7.6 percent or Tk 182.1 billion, and 7.6 percent or Tk 205.5 billion respectively.
In 2017-18 fiscal and 2018-19 fiscal the expenditure was 7.3 percent or Tk 234.8 billion and 73 percent or Tk 285.7 billion. In 2019-20 the percentage was dropped to 7 percent while the amount was Tk 289.8 billion.
To keep this outlay within a comfortable range through budgetary process, government has taken several measurers that includes enhanced transparency of transfer through e-GP and improved public procurement management.
Also read: Govt targets 17% expenditure of GDP for next two fiscals: Document
The expenditure was 6.3 percent for fiscal 2020-21, which was Tk 337.7 billion. In the medium term, the allocation on these heads has been estimated to follow a steady trend. In 2021-22 fiscal the amount is estimated at 6.2 percent of total expenditure, which is Tk 373.4 billion, while in 2023-24 fiscal this will be 6.6 percent or Tk 488.8 billion and Tk 426.5 billion or 6.5 percent of the total budget for 2022-23 fiscal.
Amid the coronavirus crisis, the government had taken up a comprehensive plan with four main strategies.
These are: discouraging luxury expenditures, prioritising government spending that creates jobs, creating loan facilities through commercial banks at subsidised interest rate for the affected industries and businesses, and expanding the coverage of the government’s social safety net programmes.
Public expenditure broadly includes all government consumption, investment and transfer payments. Current expenditure and capital expenditure are the two major categories of budget allocation.
Current expenditure consists of wages and salaries paid to the government employees, purchase of goods and services, subsidy and transfer payments and interest paid for domestic and foreign loans. Expenditures of account of 'food account operation' also includes into current expenditure category.
On the other hand, capital expenditure comprises addition to and creation of productive assets. The Annual Development Programme (ADP) and non-ADP capital expenditure are the two major categories of capital formation through government expenditures.
Moreover, capital expenditure includes loans and advances, development programme financed from revenue budget, non-ADP project, and non-ADP FFW (Food For Work) and transfer.
Considering the context of developing countries like Bangladesh, expanding the size of current expenditure is important for improving the quality of public service delivery and meeting the demand for maintaining the existing infrastructure network.
On the other hand, growth of capital expenditure is desirable to meet the growing demand for public investment.
2 years ago
Govt focuses on less current expenditure and increased capital spending: official document
The government has moved to reduce its current expenditure with a focus on increasing capital expenditure to stimulate economic growth and offset the impact of COVID-19 pandemic, according to an official document. Public expenditure broadly includes all government consumption, investment and transfer payments. Current expenditure and capital expenditure are the two major categories of budget allocation, said the document recently obtained by UNB. Current expenditure consists of wages and salaries paid to the government employees, purchase of goods and services, subsidy and transfer payments and interest paid for domestic and foreign loans. Expenditures of account of 'food account operation' also includes into current expenditure category.
READ: Govt targets 17% expenditure of GDP for next two fiscals: Document
On the other hand, capital expenditure comprises addition to and creation of productive assets. The Annual Development Programme (ADP) and non-ADP capital expenditure are the two major categories of capital formation through government expenditures. Moreover, capital expenditure includes loans and advances, development programme financed from revenue budget, non-ADP project, and non-ADP FFW (Food For Work) and transfer. Considering the context of developing countries like Bangladesh, expanding the size of current expenditure is important for improving the quality of public service delivery and meeting the demand for maintaining the existing infrastructure network. On the other hand, growth of capital expenditure is desirable to meet the growing demand for public investment. In this situation it is critical for Bangladesh to arrive at an optimum mix of current and capital expenditures through budgetary process that will help stimulate economic growth and push the economy on a higher growth path. According to the government document, the current expenditure of the government has been projected at 52.9 per cent of the total budget in medium term basis (2023-24 fiscal) while it is set at 54.2 per cent of the total budget in the running 2021-22 fiscal. It said the projection for 2022-23 fiscal is 53.2 per cent of the total budget while it was 56.6 per cent, 57.4 per cent, 56.7 per cent, 57.3 per cent, 61.6 per cent and 59.9 per cent in 2020-21, 2019-20, 2018-19, 2017-18, 2016-17 and 2015-16 fiscals respectively. On the other hand, the capital expenditure for 2023-24 fiscal has been projected at 47.1 per cent of the total budget raising from 45.8 per cent of the running 2021-22 fiscal with 46.8 per cent in 2022-23 fiscal. The document mentioned that the capital expenditure for 2015-16, 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21 fiscals were 40.1 per cent, 38.4 per cent, 42.7 per cent, 43.3 per cent, 42.6 per cent and 43.4 per cent respectively. It means that the capital spending as a percentage of total expenditure was on the declining trend from fiscal 2015-16 to fiscal 2016-17. Whereas, ADP was only 4.3 per cent GDP in 2014-15, it was 5.4 per cent of the GDP in 2019-20 fiscal. The revised estimate of ADP in 2020-21 fiscal stood at 6.4 per cent of the GDP, it said. The document said that the current expenditure has been hovering around 8 per cent of GDP during 2015-16 fiscal to 2019-20 fiscal.
READ: Tk6 trillion budget in the works for 2021-22; govt eyes increased outlay on capital expenditure For the 2023-24 fiscal the projection of the current expenditure is 9 per cent of the GDP. The ratio is same for the 2022-23 fiscal while it is 9.5 per cent of the GDP for the running 2021-22 fiscal. In 2020-21 fiscal, 2019-20 fiscal, 2018-19 fiscal, 2017-18 fiscal, 2016-17 fiscal and 2015-16 fiscal it was 9.9 per cent, 8.5 per cent, 8.7 per cent, 8.3 per cent, 8.4 per cent and 8.3 per cent respectively, as per the document.
2 years ago
Tk6 trillion budget in the works for 2021-22; govt eyes increased outlay on capital expenditure
The government allocation for public expenditure on goods and services will witness a significant rise in the coming years after a slight dip in the last couple of years.
The government has estimated to spend Tk 401.3 billion, which is 6.6% of the budget, for public expenditure in the coming 2021-22 fiscal.
The country is likely to get Tk 5933.14 billion budget for 2021-22 fiscal, Tk 253.14 billion higher than the running one, aiming to face the COVID-19 pandemic challenge for recovering the economy.
Read BSMMU announces Tk 602.73cr budget for FY 2020-21
The estimation for 2022-23 fiscal has been set at Tk 465.2 billion, which will be 6.7% of the budget.
According to an official document, the allocation for the purpose in the running 2020-21 fiscal is Tk 350 billion or 6.1% of the budget.
The document also reads that the government has estimated to bring down its expenditure in current account, including purchase of product and service, while increase the capital expenditure in the next two fiscals.
It said that the current expenditure for 2021-22 and 2022-23 fiscal has been estimated at 54.4% and 54.5% of the total budget respectively.
Also read: Spending on public servants' remuneration to witness uptick from next fiscal
As per the document, the government allocation for expenditure can be divided in current expenditure and capital expenditure.
Salaries and allowances of government employees, purchase of product and service, compensation and relocation expenses, payment of interest against foreign and domestic loans - these are all found under the current expenditure category. Besides, ‘food accounts’ and ‘expense for structural coordination’ are also under this expenditure.
On the other hand, capital expenditure is spending that leads to the creation of new productive assets and inclusion. It is akin to investment, so government-funded projects and project components in the annual development programme (ADP), as well as non-ADP capital expenditure are the two main categories for capital expenditure.
Also read: Stop unnecessary expenditure of public money: PM
Besides, loans and advance payments, development programmes from revenue budget, projects outside the ADP and non-ADP Food for Work programme and handover expenses fall under this expenditure.
The document stated that in the revised budget for the 2019-20 fiscal, the allocation for public expenditure on products and services was Tk 322.1 billion, that is 6.5% of the budget.
It also mentioned that in 2018-19 fiscal the allocation was Tk 285.7 billion which was 7.3% of the budget that year.
In four previous fiscals i.e. 2017-18, 2016-17, 2015-16 and 2014-15 respectively, the allocations were Tk 234.8 billion (7.3% of budget), Tk 205.49 billion (7.6%), Tk 182.05 billion (7.6%) and Tk 166.27 billion (8%).
Read 'Unimplementable' budget to cause public sufferings: BNP
The document said that from 2014-15 fiscal to 2018-19 fiscal the allocation for public expenditure in product and service was near about 8%.
Due to various government steps, like enhancement of transparency through introducing E-GP, development in public procurement management and others, the allocation for this sector can be delineated in the government budget process, the document said.
Meanwhile, amid the Coronavirus crisis, the government is working according to what it believes to be 'a comprehensive plan' with four main strategies.
The 4-pronged strategy entails discouraging luxury expenditures, prioritising government spending that creates jobs, creating loan facilities through commercial banks at subsidised interest rates for the affected industries and businesses, and finally expanding the coverage of the government’s social safety net programmes.
Read Govt aims to rein in budget deficit back within 5% from next fiscal
3 years ago