Forecast of governmental expenditures and revenues for the ensuing fiscal year. In modern industrial economies, the budget is the key instrument for the execution of government economic policies. Because government budgets may promote or retard economic growth in certain areas of the economy and because views about priorities in government spending differ widely, government budgets are the focus of competing political interests. The budget has been announced with eight major objectives including creating employments, maintaining prices of essentials at a tolerable level, ensuring food security and extending social safety net. INTRODUCTION
Forecast of governmental expenditures and revenues for the ensuing fiscal year. In modern industrial economies, the budget is the key instrument for the execution of government economic policies. Because government budgets may promote or retard economic growth in certain areas of the economy and because views about priorities in government spending differ widely, government budgets are the focus of competing political interests. A government budget is a legal document that is often passed by the legislature, and approved by the chief executive. For example, only certain types of revenue may be imposed and collected. Property tax is frequently the basis for local revenues, while sales tax may be the basis for state revenues, and income tax and corporate tax are the basis for national revenues.
On 9 June 2008, the Finance Adviser to the Caretaker Government presented the national budget for the financial year (FY) 2008-09 in a live broadcast over the national radio and TV. The marathon address touched upon almost all aspects of the nation’s economic life – the difficulties surmounted and the successes achieved. While highlighting the budget performance last year, he also laid before the nation the socio-economic targets for the coming year and how the government planned to achieve those. He covered a wide vista of governmental activities from agriculture to industries, from education to employment, from communications to power generation. However, there was not a word on ‘defence’, despite it being one of the largest expenditure sectors of the government. In the past, there used to be a few cursory remarks by the Finance Ministers in their budget speech promising to “build a strong defence force, able to safeguard the national sovereignty” etc. etc; but not this time. In the official website of the Ministry of Finance the allocation is reported to be Tk. 6306 crore (US$ 935 mil). Defence came out as the eighth largest sector, representing about 6.4% of the Government spending, ahead of sectors like Transport and Communications (6.1%), Health (5.9%) or Public Order and Security (5.6%). However, like the previous years, the nation remained in the dark as to the rationale behind the defence expenditure. While we know how much electricity the government plans to generate, how many new schools, hospitals or industrial estates the government plans to build or how much additional food grain we plan to harvest, we do not know what we plan to achieve with the money spent for defence. Unlike the developed countries of the west, defence expenditure continues to remain shrouded in secrecy in our part of the world. TRENDS IN DEFENCE SPENDING
During the last financial year, while most government departments could not spend their allocated budget, the defence, like previous years, overspent and got additional budget of Tk.536 crore over the FY 2007-08 allocations. In fact, this had been the trend over the last five years when defence got additional allocation in the revised budget at the end of the year. Although the defence budget in the absolute term had been increasing, its share in the total national budget had been falling for more than a decade. While in the 80s and early 90s, the defence’s share used to be around 10% of the total government spending, it has come down to its...