Budgeting in iBAS++

Government Budget

 In general, budget is the financial plan of a government for a

given period, usually for a fiscal year, which shows what its
resources are, and how they will be generated and used over the
fiscal period;
 The government budget also refers to the income, expenditure,
fiscal deficit (if any) and sources of borrowings of the Government
that are used to achieve national objectives, strategies and
programs;
 The budget is the government’s key instrument for promoting its
socio-economic objectives;
 In Bangladesh, budget is implemented from 1st of July of a year to
30th June of the following calendar year which is known as
financial year (or fiscal year).
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 Legal basis of Budget

 Article 87 of the Constitution states that:

 There shall be laid before Parliament, in respect of each
financial year, a statement of the estimated receipts and
expenditure of the Government for that year, in this Part
referred to as the Annual Financial Statement (AFS);
 The AFS shall show separately – the sums required to
meet expenditure charged by or under this Constitution
upon the Consolidated Fund; and
 the sums required to meet other expenditure proposed to
be made from the Consolidated Fund; and shall
distinguish expenditure on revenue account from other
expenditure
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 Legal basis of Budget
 Section 10 of the Public Moneys and Budget Management Act, 2009 states
that:
 Other expenditure shall be distinguished from charged expenditure in the
annual budget;
 Expenditure on revenue account shall be distinguished from other expenditure
in the annual budget;
 The Finance Minister shall submit a Medium Term Budget along with the
annual budget before Parliament and the Medium Term Budget shall
consist of estimated receipts and expenditure of the Government for the
budget year and projections for two outer years;
 The Medium Term Budget shall establish linkages between government
policies and objectives to resource allocations and resource allocations to
performance of the Ministry or Division.

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 Structure of Government Budget
Revenue and Grants
Tax revenues
Non-tax revenues
Grants
Expenditure and Net Lending
Recurrent or revenue expenditure
Capital or investment expenditure
Net Lending

Overall Balance (Surplus/Deficit) .

Financing
Foreign (net)
Domestic (net)
Borrowing from Financial Institutions
Borrowing from other sources 5
 What is an MTBF
 A budgeting approach that
 adopts a medium-term perspective to budgeting (3 years)
 rolling approach, updated annually
 links Government’s policies and priorities to
resource allocations and resource allocations to
performance
 emphasizes the efficient use of limited public
resources for results

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 Objectives of MTBF
Main objectives of the MTBF are:
1. ensuring macroeconomic and fiscal sustainability;
2. establishing the linkage between policy priorities
and resource allocations;
3. promoting a system for monitoring the
performance against targets; and
4. removing gradually the demarcation between two
budgets” (revenue & development budget)

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 Phases of MTBF process
 Macroeconomic Modeling phase
 Developing the macroeconomic framework
 Strategic Phase
 Budget Circular-1 is issued
 Agreement on sectoral/ministry programs & subprograms
 Tripartite meetings among the Ministry of Finance,
Planning Commission and sector ministries
 Develop Agreed Budget and Expenditure Framework
 Resource Estimation Phase
 Budget Circular-2 is issued
 Preparation of forward estimates by ministries within BMRC
approved ceilings
 Budget Approval Phase
 Review of estimates in FD and presentation to Cabinet for
approval and parliament for appropriation
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The Phases in Budget Making Process under MTBF
Strategic
Phase Process Institutional Arrangements

MTMF (updated twice a year) Coordination Council

Preliminary Indicative Resource Ceiling (BC-1) BMRC
Ministry Budget Framework (Two Parts) BMC+BWG in LMs

Scrutiny by FD and PC FD + PC
Tripartite Meeting FD+PC+LM
Estimation
Phase

BC-2 with final resource ceiling BMRC

Accommodating FD and PC observations on LMs
MBF with resource ceiling

Submission to FD and PC LMs

Approval
Phase

Submission to Cabinet and Parliament FD 9