Budget Management in Bangladesh:

Legal Framework and Institutional

Arrangement
Legal Framework for Government Budgeting-1:
The Constitution and Rules of Procedure


Md. Habibur Rahman, Additional Secretary, FD

Mohammad Saidul Islam, Deputy Secretary, FD
 Learning Objective

At the end of this session the participants will
have a basic understanding of the --
 Governance and Accountability
framework established by the constitution
of Bangladesh by which budgeting and
financial activities must operate
 Roles of Consolidated Fund and Public
Accounts
Legal Basis of Budget

Constitution of Bangladesh
Public Money and Budget
Management Act, 2009
Rules of Procedure of Parliament
Rules of Business, 1996
Secretarial Instruction
General Financial Rules
Constitutional Provisions on
Budget

The Constitution of Bangladesh
provides for the basic legal framework
for budgeting,

Article 81 to 93 of the Constitution

highlight the budgetary procedure.
 Money Bill{Art.81(1)}

Money Bill means a Bill containing provisions dealing
with all or any of the following matters:-
Imposition/regulation/alteration/remission/ repeal of
any tax,
Borrowing of money/giving of guarantee by the
Gov./ amendment of any law related to the financial
obligations of the Gov,
Custody of CF/payment of money into/issue or
appropriation of money from CF,
Imposition/alteration/abolition of a charge upon CF.
Money Bill{Art.81(1)} cont…

Receipt of money on account of the CF or
PAR or custody or issue of such moneys;
The audit of the accounts of the Gov;
Any subordinate matter incidental to any of
the matters specified in the forgoing sub-
clauses.
Money Bill {Article 81(3)} Cont…

Every Money bill when it is presented to
the President for his assent, bear a
certificate under the hand of the Speaker
that it is a money bill.
Such certificate shall be conclusive for all
purposes and shall not be questioned in
any court.
Article 82. Recommendation for
financial measures.

No money bill shall be introduced
into Parliament except on the
recommendation of the President.
However, no recommendation is
required for the reduction or abolition
of any tax.
Article 83 (No Taxation except by
or under act of Parliament.)

No tax can be levied or collected
except by or under the authority
of an Act of Parliament.
 Public Account (Article 84)

All receipts & income of the
Government are credited to the Public
Accounts which consists of two main
parts-
 Consolidated fund (CF) &
 Public Account of the Republic
(PAR).
Consolidated Fund (CF) and the Public Account
of the Republic (PAR) (Art.84)

CF PAR
CF Shall be comprised All other public moneys
of: received by or on behalf of
All revenues received the Gov. shall be credited to
by Gov. the PAR.
All loans raised by
Gov.
All moneys received
by it in repayment of
any loan
 Consolidated fund

Consolidated fund receipts are:
 All tax & non tax revenue receipts;
 Grants;
 All Domestic (except National Saving
Instruments) & external borrowing;
 The receipts representing recoveries of
principal amounts of loans and interest on
them.
 Public account of the
Republic

All other public monies received by or on
behalf of the Government are credited to
the public Account of the Republic,
includes among them:
 GPF
 National Saving schemes
 Security deposit etc.
 Regulation of Public
moneys (Article 85)

The custody of public moneys, their payment
into and withdrawal from the CF, or
The Public Account of the Republic and
matter related to ancillary to the matters
aforesaid shall be regulated by the act of
Parliament and
Until provision in that behalf is so made, by
rules made by the President.
 Annual Financial Statement
(AFS) Art.87

 In respect of each financial year, an AFS shall be laid before
the Parliament.
What is an AFS?
 It is a statement of estimated receipt and expenditure of
Gov.;
 AFS shall show the charged and the other expenditure
separately; and
 Distinguished expenditure on revenue account from other
expenditure.
 Annual Financial Statement 2015 -16
Summary of Budget Estimates
Statement 1 Consolidated Fund - Receipts : Economic Analysis Summary


 
Statement 2 Consolidated Fund - Receipts : Summary by Ministry/Division

Statement 3 Public Accounts of the Republic - Receipts

Statement 4 Consolidated Fund : Non-Development Expenditure - Economic Analysis Summ

ary
Statement 5 Consolidated Fund : Development Expenditure - Economic Analysis Summary

Statement 6 Consolidated Fund : Non-Development Expenditure (Ministry/Division Wise)

Statement 7 Consolidated Fund : Expenditure (Ministry/Division Wise)

Statement 8 Consolidated Fund : Development Expenditure - Ministry/Division Wise

Statement 9 Public Accounts of the Republic - Payment

Statement 10 Demand for Grants for 2012-13

Statement 11 Demand for Grant and Appropriation for 2012-13
 Charged Expenditure upon CF (Art.88)
 Remuneration of the  Administrative expenses (including
President and other remuneration payable to officers
expenditure of his office and staff )of the Parliament, SC,
 The remuneration of C&AG, EC and PSC
 Speaker and Deputy  All debt charges including interest
Speaker for which the Gov. is liable
Judges of the Supreme  Any sum required to satisfy a
Court judgment, decree or award against
C & AG the republic by court
Election  Any other charged expenditure as
Commissioners determined by and Act of
Parliament
Members of PSC
Procedure relating to AFS; Charged
and other expenditure (Art. 89)

Charged expenditure may be discussed in, but
shall not be submitted to the vote of Parliament.
Other expenditure (voted ex.) shall be laid before
the Parliament for vote in forms of Demand for
Grants, and Parliament may assent to/refuse to
assent/ assent to it subject to the reduction of
amount specified therein.
Demand for grants shall be laid before the
Parliament upon recommendation of the
President.
Appropriation Act {Art. 90(1)}

Appropriation Bill is introduced in the Parliament
as soon as may be after the grants under Art. 89
have been made by Parliament
Appropriation Act provides for appropriation out
of the CF of all moneys required to meet
 The grants so made by parliament, and
 The charged expenditure but not exceeding the
amount shown in the AFS laid before
Parliament.
Appropriation Act {Art. 90(1)}

No amendment be proposed in Parliament to
any such Bill which has the effect of varying
the amount of any grant so made or altering
the purpose to which it is to be applied or of
varying the amount of any expenditure
charged on the CF.
Appropriation Act {Art. 90(3)}

Subject to the provisions of this
Constitution no money shall be
withdrawn from the CF except under
appropriation made by law passed in
accordance with the provisions of this
article.
 Supplementary and Excess
Grants (Art. 91)

 In respect of a FY, the President shall have the power
to authorize expenditure from CF (both charged and
voted), if it is found that
 An amount is insufficient,
 There is a need for expenditure upon a new
services not included in AFS for that year,
 Excess money has been spent on a service for
that year.
 Supplementary Financial statement (SFS) should be
laid before the Parliament following the procedures of
Art.87-90.
 Revised Budget

The budget is revised during the second half
of the FY on the basis of performance &
requirement.
During this revision, the original allocation
may increase or decrease.
The amount increased or decreased during
revision is reflected in Annual financial
Statement.
This revised allocation is known as Revised
Budget.
 Supplementary Budget

The amount increased during revision of budget
required to be approved by parliament.
Hence the increased amount is submitted to
parliament in the form of Supplementary Grants.
These Supplementary Grants when approved by
parliament are known as Supplementary Budget.
The Revised budget covers both increased &
decreased amount after revision but a
Supplementary Budget include only the amount
increased after revision.
 Vote of Account, Vote of Credit
{Article 92(1)}

Notwithstanding anything in the foregoing
provision of this chapter, Parliament shall have
power---
(a) To make any grant in advance in respect of
estimated expenditure for a part of any FY
pending the completion of the procedure
prescribe in article 89 for voting of such grant
and the passing of a law in accordance of article
90 in relation to that expenditure.
Vote of Account, Vote of Credit
{Article 92(1)}

(b) To make a grant for meeting an unexpected
demand upon the resources of the republic when no
account of the magnitude or the indefinite character
of the service, the demand can not be specified with
the detail in an AFS,
(c) To make an exceptional grant which forms no
part of the current service and
Parliament have power to authorize by law the
withdrawal of money from CF for the purpose for
which such grant are made.
Vote of Account, Vote of Credit
{Article 92(3)}

Notwithstanding anything contained in the foregoing
provisions of this chapter in respect of a FY, Parliament,
Has failed to make the Grants under article 89 and pass the law
under article 90 before the beginning of that year and has not made
any grant in advance or
Failed to make the grant under article 89 and pass the law under
article 90 before the expiration of the period for which the grants in
advance were made under this article,
The President may upon the advice of the PM, by order authorize
the withdrawal from the CF moneys necessary to meet
expenditure mentioned in the financial statement for that year for a
period not exceeding 60 days in that year, pending the making of
grants and passing the law.
 Article 93(3,4).Ordinance
making power.

When Parliament stands dissolved the President
may, if he is satisfied that circumstances exist which
render such action necessary, make & promulgate
an Ordinance authorizing expenditure from the
consolidated fund, whether the expenditure is
charged or not & any ordinance so made shall have
the like force of law as an act of Parliament.
Every Ordinance promulgated under clause (3)
shall be laid before Parliament as soon as they may
be .
Rules of Procedure of Parliament


Chapter xvi, Rules 111-129 stipulates the
procedure in financial matters.
Important Provisions:
Presentation of Budget: AFS shall be presented
to Parliament as per provision of Article 87 of
the Constitution. R.111(1)
The Budget shall be presented to the House in
such form as the Finance Minister may consider
suitable. R.111(2)
Budget shall not be referred to any committee
(R-111(3))
 Documents submitted to the
Parliament

The following Budget documents submitted to the Parliament
as per R.111(2):
1. Budget Speech, Bangla & English
2. Budget in Brief, Bangla & English
3. Annual Financial Statement, Bangla & English
4. Supplementary Financial Statement,
5. Consolidated Fund Receipts, Bangla & English
6. Demands for Grants and Appropriations, Non. Dev &
Dev, Bangla & English
7. Demands for Grants and Appropriations, Dev
8. Medium Term Budget Framework, Bangla & English
9. Economic Review
 Documents submitted to the
Parliament

The following additional documents submitted to
the Parliament:
1. Women's Advancement and Rights in Twenty
five Ministry/Divisions Activities, Bangla &
English
2. Journey Towards a Digital Bangladesh: an
update .Bangla & English
3. Power and Energy Sector Roadmap: Second
update. Bangla & English
 Documents submitted to the
Parliament

The following additional documents
submitted to the Parliament:
1. Women's Advancement and Rights in
Twenty five Ministry/Divisions Activities,
Bangla & English
2. Journey Towards a Digital Bangladesh: an
update .Bangla & English
 Stages of the budget
discussions in Parliament


General Discussion on Voting on demand

discussion on demand for grants for grants of other
budget and appropriation expenditure
 General discussion of the
Budget

 On a day to be appointed by Speaker, the
House shall be at liberty to discuss the
budget as a whole(R:115(1))
 During the general discussion FM has the
general right to reply (R:115(2))
 The Speaker may prescribe a time limit for
speeches. (R:115(3))
 Demand for Grants

 Separate demand shall be made in respect of
grant proposed for each ministry (R:116(1)
 Each demand shall contain a statement of
the total grant and then a statement of
detailed estimates (R:116(2))
 No demand for Grant shall be made except
on the recommendation of the President.
(R:116(3))
 Voting of Demand for
Grants

In consultation with the Leader of the House, the
Speaker shall allot so many days as may be
compatible for discussion and voting on demand for
grants(R:117(1)).
On the last day of the allotted days, the Speaker shall
forthwith put every question necessary to dispose of
all the outstanding matters in connection with the
demand for Grants. (R.117(2))
Motions may be moved to reduce a demand for a
grant but not to increase a grant or alter the
destination of a grant (R:117(3)).
 Cut Motion (R:118)

A motion may be moved to reduce the amount of a demand
in the following ways:
 Policy Cut:
“that the amount of the demand be reduced to Taka 1”
representing disapproval of the policy underlying the
grant.
 Economy Cut:
“that the amount of the demand be reduced by a specific
amount” representing the economy that can be effected.
 Token Cut:
“that the amount of the demand be reduced by Taka 100” in
order to ventilate a specific grievance.
 Supplementary grants and scope
of discussion.

 Supplementary, excess grants be regulated by the
same procedure as is applicable in the case of
demand for grant.
( R.123)
 Debate on Supplementary grants be confined to the
items constituting the same, no discussion on the
original grants is allowed. ( R.124)
 Appropriation Bill.
(R.126)

Procedure in regard to an Appropriation Bill is
the same as for other bill with such modification
as the Speaker consider necessary;
Provided that the Appropriation Bill shall not be
referred to any Committee;
Provided further that no amendment shall be
proposed to any such bill.
