Spend 60% of budget by Q3, or no money in next quarter

Ministries and divisions will get no money for the fourth quarter of this fiscal year if budget spending remains below 60 percent in the first three quarters, the Finance Division warned in a directive yesterday.

The strict measure has been adopted to prevent the last-minute rush in budget spending at the end of the fiscal year, which often leads to misuse of government funds, according to a circular issued by the Finance Division.

If the agencies fail to meet the set quota by the third quarter, the release of the fourth instalment will be automatically withheld, the circular warned.

The Finance Division stated that past experience shows budget implementation by ministries and divisions tends to be sluggish in the early part of the fiscal year, while spending surges in the final quarter.

In some cases, it noted that allocated funds are disbursed and spent hastily near the end of the fiscal year without aligning with actual needs. Such spending, often done without following proper procedures, leads to misuse, wastage, and irregularities in the management of limited government resources while compromising the quality of public expenditure.

This also results in the government being forced to take on unplanned loans at the end of the year, undermining fiscal discipline, it added.

The circular stated that timely and proper implementation of the approved budget would help avoid unplanned borrowing and ease the pressure on government borrowing.

A senior official from the Ministry of Finance said the decision has been taken as the situation has not improved despite repeated instructions to ministries to curb such mismanagement.

According to ministry data, the budget size in the last fiscal year was Tk 7,97,000 crore. Of this, only Tk 96,257 crore, or just 12.47 percent, was spent in the first quarter. The picture was even bleaker for development expenditure, with only 3.75 percent of the allocation spent in the first three months.

Spending picked up later, reaching Tk 4,92,245 crore over 11 months.

The original allocation was later revised down to Tk 7,43,999 crore. To meet the revised target, Tk 2,51,754 crore would need to be spent in the final month alone, whereas the average monthly expenditure over the previous 11 months was Tk 44,749 crore.

Data for the last month is not available yet.

The Finance Division has issued several directives for the current fiscal year to avoid a repetition of the trend. For instance, if the budget implementation plan for the first quarter is not entered into a designated system or menu, the second instalment will not be released. Ministries must also comply with nine other instructions.

Furthermore, all ministries have been directed to submit their budget implementation plans by September 30 and to send quarterly monitoring reports to the Finance Division within one month after the end of each quarter.