LITTLE CARE for quality spending

“The time has arrived for all to march ahead by coming together burying all differences and shunning the path of envy and violence. Let us now prepare for a prosperous, happy and peaceful Bangladesh of 2041,”

Finance Minister AMA Muhith

When resources are limited, only quality, efficient spending can bring higher and sustainable growth. And this is where Bangladesh needs to concentrate on.

Doing otherwise will lead to bad governance and breed corruption, which will in turn impede development. Two government projects are a case in point.

The Dhaka-Chittagong four-lane highway project, taken up in 2005, was to complete in 2012 at an estimated cost of Tk 1,600 crore. But it didn't. By the time the construction completed in the middle of last year, the cost shot up to Tk 3,900 crore -- a rise of nearly 150 percent.

Dubbed the bloodline of the country's business, this highway is used mainly to carry the goods Bangladesh exports and imports, which were worth $75 billion in 2015-16. And the purpose of expanding this road was to ease the traffic bottleneck at various points and help smooth transport of goods to and from the port city.

But the taxpayers, whose money paid for the highway, are yet to reap the full benefit due to poor planning, faulty design and a lack of vision.

Chittagong is some 265km from Dhaka and the travel time should be maximum three and a half hours at 80km per hour. In reality though, it still takes about 15 to 16 hours on some days because of traffic congestion, mainly at two points -- Kanchpur and Meghna bridges.

The second example of such poor-quality spending is the 8.25km Moghbazar-Mouchak flyover project taken up in January 2011. It was to complete in 2015. Later, the deadline was extended by 18 months and the cost shot up to Tk 1,327 crore, nearly double the primary estimate.

Considering Bangladesh's low revenue earnings, the value of money is higher than in many other countries, including the neighbouring nations. Tax collection in terms of GDP stands at only around 9 percent, one of the lowest in the world.

But instead of focusing on quality spending, Muhith set his eyes on increasing the budget size and revenue earnings.

If past records are any indication, a 26 percent rise in the outlay and a 34 percent hike in revenue are too high a target to achieve.

To ensure the best use of every penny, Muhith's focus should have been on improving capacity and governance and combating corruption, which eats away a big chunk of the government's hard-earned revenue.

The total outlay is not “ambitions” as dubbed by many, including some BNP leaders. The upcoming budget size is only 16 percent of the GDP; in emerging and developing economies around the world, the outlay is up to 30.8 percent of the GDP. The finance minister wants to raise it to 19 percent of the GDP in the next few years.

But incremental expenditure and revenue targets without increasing the capacity will only widen the scopes for further pilferage of the limited resources.

There is nothing wrong in raising taxes, without which government cannot serve the people. Sometimes tax needs to be increased to help deal with economic problems, such as financing the budget deficit and giving incentives and subsidies to different vulnerable groups of the society.

But taxpayers have a right to know where the money is going and how efficiently it is being spent. Also, is their money going to bring them quality services?