Major questions over implementation capacity of ambitious budget

Bangla Press Desk:    The debate that has emerged within economic circles over the proposed large-scale budget primarily centres on its implementation capacity and sources of financing. While the budget appears ambitious on paper, the gap between its targets and the actual capacity of the economy is evident.

The biggest challenge facing the budget is revenue generation. Over the past few years, revenue collection has consistently fallen short of targets. Against that backdrop, setting a significantly higher revenue target in a single leap appears unrealistic. Given the limitations of the tax net, widespread tax evasion and weaknesses in tax administration, achieving such growth under the existing system will be extremely difficult.

At the same time, the budget deficit has already reached a substantial level.

To finance this deficit, reliance on foreign assistance is increasing alongside domestic sources. However, the reality of foreign financing is also challenging. A gap between pledged funds and actual disbursements has existed for many years, leaving considerable uncertainty over the availability of financing.

Questions also remain regarding the government's capacity to implement the Annual Development Programme (ADP). Past experience suggests that even when large development allocations are made, administrative bottlenecks, slow project implementation and poor coordination often prevent the full utilisation of allocated funds. As a result, a significant portion of development plans remains confined to paper.

Moreover, the country's overall economic situation remains under pressure. High inflation, liquidity shortages in the banking sector, rising interest rates and stagnant investment have combined to place the economy in a fragile position.

Mismanagement in the port, energy and transport sectors has increased production costs, placing additional strain on industry.Therefore, if such an ambitious budget fails to be implemented effectively, it could place further pressure on the economy. Inflation could rise even more, foreign exchange reserves could come under strain, and instability could emerge in the currency market.

Overall, ensuring the success of the budget will require more than setting ambitious targets. It will demand realistic revenue strategies, stronger administrative capacity and improvements to the investment climate. Rapid and effective reforms in these three areas are essential. Otherwise, the large budget may remain little more than a set of impressive figures on paper.