Fiscal transparency can be defined as the wide availability and easy access of government financial information to encourage accountability and trust. It refers to the extent to which a government publishes and delivers accurate information about its financial activities and obligations.

Comprehensive budget documentation, public availability of financial information, clear and consistent accounting practices, and independent auditing are essential to improving fiscal transparency, promoting good governance and enabling informed decision-making.

In recent times, several initiatives have been undertaken to strengthen fiscal transparency in Bangladesh. In 2018, the Fiscal Responsibility and Debt Limitation Act was passed to promote fiscal discipline and transparency by setting limits to government borrowing and deficits.

The implementation of the Open Government Data portal to encourage citizens to monitor government spending and revenue generation, strengthening audit and oversight institutions, and enhanced reporting on development projects are some noteworthy initiatives in the right direction.

However, there are some areas where improvement is needed.

Lack of comprehensive and timely information about the budgetary process as well as inadequate information regarding the allocation of resources and objectives of spending have been persistent challenges in enhancing fiscal transparency.

According to the 2023 fiscal transparency report of the US State Department, Bangladesh's budget document is publicly available, contains reliable information, and provides a clear picture of planned revenue and expenditures. However, the end-of-year report was not public within a reasonable timeframe and budget documents were not prepared following international good practices and they lacked a breakdown of expenditure for executive offices.

While the law of Bangladesh specifies the criteria and procedures to be followed to award contracts for natural resource extraction, basic information on such awards has not been consistently made public.

The lack of transparency in awarding large and lucrative public sector contracts raises concerns among citizens and the international community regarding the possibility of such contracts not being awarded based on objectivity and fairness but rather based on undue influence, political pressure, and other unscrupulous means.

The existence of this kind of vagueness and obscurity in the government contract awarding process does not endow confidence and continues to only benefit those with corrupt motivations.

With questionable independence standards when compared to international practices, the effectiveness and reliability of external audits of financial statements have long been a concern. Moreover, the reports of the supreme audit institution of Bangladesh do not contain substantial findings and were not made public within a reasonable timeframe, according to the US State Department. 

Strengthening systems for public expenditure management, increasing revenue transparency by providing clear and easier-to-understand information on tax policies, rates, and exemptions, enhancing transparency in public debt management, and increasing citizen engagement are some additional areas where improvement can be made.  

A major deterrent to fiscal transparency is corruption as well as those influential officials who continue to indulge in corrupt practices. As a developing country with very limited resources, it is crucial for Bangladesh to create accountability of the government and foster trust between the public sector and the citizens.

Increased transparency in fiscal practices would contribute towards boosting investor confidence and attracting greater investment. It would also ensure equitable distribution of public benefits and improved public service delivery.

The author is an economic analyst