THE government, as the reports in national dailies suggest, is pressing ahead with plans to modernise its budgetary activities. The modernisation can update budget-making through the adoption of a more transparent and accountable process and, more significantly, linking the budgetary provisions to actual progress attained or not by various departments or ministries of the government. Reportedly, the finance division has sent a circular to 10 ministries, directing them to work out a performance indicator under the medium term budget framework (MTBF) as future allocations are to be made to them on the basis of such indicators. This is a primary initiative and gradually it will be aimed to bring all government bodies under such a framework of budgeting. The objective of the new model budgeting is to stop waste of resources worth billions of takas in the revenue and development budget of the government-run bodies.
Indeed, the intended modernisation should be welcome because the conventional administrative budget that guided allocations or expenditures in Bangladesh so far is outmoded and hardly suitable for a modern government. The current stress worldwide is 'performance budgeting' which stresses a government's ends and the progress made in achieving them rather than the means by which those ends are achieved. The traditional budgetary procedures emphasise only the financial aspects of expenditures when a budget is formulated, executed or audited. But performance budgeting seeks to measure the results achieved in physical or real as well as in financial terms. Thus, at the start of a budgetary period, a performance budget may show estimates of miles of roads to be leveled or paved, the number of teachers to be trained, additional number of students to attend schools, acres of land to be irrigated as well as the expected cost of each function, project or activity. Thus, after the budgeting period has passed, such a performance budget can show the actual achievement in each of these fields obtained from actual budgeting expenditures.
A conventional budget with object headings is, therefore, a much more limited instrument than a performance budget for planning and other purposes. It does not supply physical measurements or comparisons. Even as a financial instrument it is inadequate for planning because it does not relate what is bought with what is done. When the object headings show what the government buys but not why, the same do not then reveal the nature of government programmes or the real accomplishments under those programmes. In this context, the move to introduce performance budgeting is a step in the right direction in the context of Bangladesh. But the successful introduction of the new type of budgeting will also require taking care of underlying personnel, organisation and procedural inadequacies which presently exist in the government services of Bangladesh.
There is no denying that performance model budgeting is a superior one compared to the conventional one. But its effective application depends on remedying the above deficiencies. Donors have been providing inspiration in the main to go for performance budgeting. The urging from them to make better utilisation of resources and to attain a measure of accountability and transparency in government's spending, is well understood. But the donors should also be generous in helping the government out with training personnel and other forms of assistance that would be vitally needed to change over smoothly to the new system of budgeting.