Budget and the common folks

daily star

daily star

“Budget” is a meaningless word for her.

WHILE returning from the Aila affected areas, I watched part of the budget speech of the honourable finance minister in a rural tea stall surrounded by a group of villagers. They were surprised by my rapt attention to the speech and some wondered aloud: What’s the use of watching the budget speech? If the wood apple ripens, how does it help the crow? Will we get any share of the crores of taka of the budget?

Come to think of it, what benefits will the common folks derive from the budget? Very little of the increased GDP truly trickles down to them. The debate about whitening black money is not relevant to them. The change of the tariff rates on vehicles also does not directly affect their lives. Thus, the size of the actual budget presented matters little to most ordinary citizens.

In fact, more than three-dozen budgets were prepared since independence, much rhetoric spent on improving conditions of the poor and a lot of money was brought from abroad in their name, yet abject poverty is still a part of everyday life of most rural citizens. They never got a fair shake, and the disparity between them and the privileged class has been widening over the years.

Can anything better be expected this time? To probe into it, let me begin with a crude calculation. The proposed total budget is for about Tk.1,14,000 crore and the ADP is for Tk.30,500 crore. The per capita share of each citizen in the budget is about Tk.7,600 and Tk.2,000, and the share of a family of five is about Tk. 38,000 and Tk.10,000 respectively. It must be noted that these are their shares, but not their entitlement, as part of the budget goes into running the government to paying for debt servicing to ensuring national security.

Although not entitled to receive them, the citizens have the right to get services (education, health, credit, security etc.) of equivalent amount. Do the common citizens get them? If not, who gets them? In the past, the urbanite rich normally got most of the benefits. As a result, the urban-rural disparity in the country has continuously widened, creating a fertile breeding ground for social unrest and extremism.

If the total budget and the ADP are divided into approximately 4,500 UPs, their average share will be about Tk.25 crore and Tk.7 crore respectively. How much of this money is spent in a union and through the UP?

Several years ago, volunteer-animators of The Hunger Project introduced, for the first time, open budget meetings at the grassroots level, where we tried to estimate the amount of money directly spent by the government in a union. We found that in Fathepur UP under Mirzapur upazila of Tangail, where such a meeting first took place in June 2001, about Tk.1.1 crore was spent via the upazila, from which about Tk.23 lac, or 23%, was spent through the UP. Only a puny amount of Tk.3 lac was allocated to the UP from the ADP. Of the remaining Tk.68 lac, nearly 73% was spent on salaries and benefits, especially for the primary and secondary school teachers.

Of their share of crores of taka, if on the average only Tk.1.1 crore is spent in a union, where does the remaining amount go? The remainder is obviously spent, although centrally through ministries, directorates and sub-directorates. A large portion of it goes into paying overheads, another into producing public goods, and still others for public services. A big chunk either falls prey to corruption or is wasted. It should be noted that little of the centrally spent amount normally leaves the cities, depriving the rural areas of much of their benefits.

I have seen the evidence of how the centrally spent money is stolen in Aila affected areas of Satkhira. The main reason for much of the devastation in the coastal areas of Satkhira was the tidal wave, which washed away the embankments. According to residents, the embankments were first built in 1962. Crores of taka were subsequently “spent” for repairs and maintenance but there was very little improvement because of corruption. The result was damage to crores of taka worth of property.

The lack of a mechanism for ensuring the accountability of the government functionaries at the local level and the lack of people’s awareness allowed them to get away with such corruption. An effective system of local government could redress these problems.

A UP’s share in the proposed budget is a minimum of Tk.7 crore (from the ADP) and the maximum of Tk.25 crore (from the total budget). If a good chunk, say Tk. 3-4 crore, of this share is directly spent in each union every year while mobilising and involving the people, there would be significant changes in the lives of the rural people due to improvement in education, health, sanitation, safe water, women’s conditions, environment, family planning, self-employment, etc. These problems are local, and they must also be solved locally under the leadership of elected local representatives — they cannot be solved centrally.

The transparency and accountability of these increased expenditures can also be ensured through legally mandated “gram sabhas” or “ward sabhas.” Such an institutional mechanism can also ensure people’s participation in solving the problems and a transition to participatory democracy. As our honourable prime minister wrote in 1995 (Poverty Eradication: Some Thoughts, Agami Prokashani): “If the democracy is not meaningful for the poor, its foundation is bound to get weakened.”

If a large segment of the budget is spent at the grassroots with effective participation of the people, poverty will be eradicated in no time, the common people will get their fair share of the national resources and vibrancy will be infused in rural life. All these are part of the election manifesto of the present government, and achieving them will require massive devolution of power and resources and strengthening of the local government system.

Unless the local government is made the centre of all development activities, the common people will continue to be deprived of their rightful shares of national resources, and the budget will continue to remain the concern of the functionaries and businessmen. Our prime minister had rightly said in 1995: “Only a decentralised state, not the bureaucratic state, can effectively implement the poverty eradication programs and can ensure the participation of the people in such them. For this reason, a skilled and representative local government must be created.”

There is also a practical reason for decentralisation and strengthening of local bodies. Large budgets will not bring any dividend unless they are implemented. Our past experience of ADP implementation is dismal. Only through decentralisation of power and resources can the situation be redressed. Thus, the commitment to “eradicate poverty and halt disparity will require strengthening of local government and empowering of the leadership of nearly 60,000 elected local representatives. Such a change will ensure equity and social justice, which are missing from the current discourse on the budget. Lest we forget, we know the disastrous consequences of a highly centralised state like Pakistan.

Looking at the incentive package of Tk.5,000 crore earmarked for combating the possible impact of the worldwide economic meltdown, we would like to know who will get shares and how its distribution will benefit the common folks. Given the present economic uncertainty, it is important to stimulate the domestic economy and increase internal demands.

Couldn’t the finance minister come up with an additional incentive package of, say, Tk.6,000 crore, from which 6 crore poor of our country could be given a cheque of Tk.1,000 each? This would definitely give a shot in the arm to the domestic economy, and at the same contribute to social justice and economic good governance. This would also make the recipients reach a higher indifference curve and gain larger benefits from these transfer payments.

Dr. Badiul Alam Majumdar is Global Vice President and Country Director, The Hunger Project-Bangladesh, and Secretary, SHUJAN — Citizens for Good Governance.

Reference by: The Daily Star, 1st July 2009

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