The Financial Express
Swasti Lankabangla Swasti Lankabangla

Austerity has to be all-encompassing  

| Updated: October 22, 2019 22:22:44

Austerity has to be all-encompassing   

It took a new Prime Minister in Boris Johnson and a new Chancellor of the Exchequer Sajid Javed to officially bring to an end the nine-year old Austerity era on which the UK Conservative party was elected. The British people moaned under the measures that effectively halted much required funds for the National Health Service (NHS) and the building and repair of schools and structures in county councils.

This unpopular move was essential to bring down the deficit caused by the massive overspend the previous Labour Party had launched to kick-start the sagging economy. Much was made of David Cameron going to Scotland by train rather than fly and there was humour at him having left behind his briefcase on one of those trips.

Austerity is a continuous process and calls for greater scrutiny of government expenses given that it doesn't follow zero-based budgeting so popular with company management. There all expenses sometimes get quizzed more than twice. Even non-government agencies approve budgets and then expect at least a 10 per cent savings from there.

The Bangladesh government does a great job of it not by saving but in its inability to spend allocation for the Annual Development Programme (ADP) or what is considered as development budget.

Recently the social media was awash with the story of a contractor having returned to the exchequer a sum of money saved from a project. It quotes the relevant official rubbishing the news. Much as one would like to cheer the act one has to side with the official. Money is paid, bar an advance proportion, after a project is implemented. The idea of money being returned after bills have been scrutinised just doesn't come in to play. An example perhaps could be Mr. Donald Trump's famous "fake news". On the contrary, the official must be appreciated for pointing out an anomaly that shouldn't have come up at all.

The ministers for Agriculture and Finance ministries have gone on record to say that it isn't unusual for some anomalies in mega projects thereby suggesting there is evidence of 'shall we say, permissible graft?'. It sounds similar to the systems loss that was so often bandied in the days checks were made on electricity generated and used.

But if proper audit takes place after each phase of a project such graft can be detected, acted upon and steps put in place to prevent recurrence in the next phase. That of course involves an "if" -- if the will is there. There have been many reports of bills having been paid without any work done and worse still work stopped half way through for shortage of funds. And all that happens despite the inability to spend full ADP allocation.

Each year the Comptroller and Auditor General faithfully submits to the President, the audited report of government expenditures. Whether there are anomalies that require attention to has usually not been revealed. The one we do know about is overwriting by the National Board of Revenue (NBR) of tax collections. This was overruled with a damp squeak by the Chairman. The matter in question is submitting taxes less than that reported. Again no action was taken against those sending in their reports.

In absence of an authority that can deliver stricture in both under and over spend, there is a fine corridor that allows for corruption. The Anti-Corruption Commission is acting upon complaints but they don't have the manpower to go full tilt.

The essentially black money mostly derived in cash from illegal business and that what has been seized suggests a group has more money than they can spend, so much so that two brothers converted their casino into bullion and then fled.

Less money in circulation limits the penchant of such gambling. And one of the channels of circulation of illicit money comes through extortion from observance of 'Days' and 'occasions' that are unproductive. Austerity in observing such programmes will reduce the options of an overflow of open cash. And scrutiny of new businesses and expanding business for source of funds with as careful an eye on government expenditure could be one way of combating free funds available for the student leaders and their cronies.


Share if you like