Assignment On Fiscal Policy

Issues: What is the most prominent document that elaborates the Fiscal Policy of Bangladesh? As head of the government how would you design your next fiscal policy?

Submitted By Md. Mizanur Rahman Roll No: 03 MPA in GPP

April 18, 2011

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Introduction
Fiscal policies play a main role to the economic development of a country. It is the decision of the government about How to earn revenue and gather resources from various sources, for what to spend those earnings and resources, how much to spend and, when to spend. Main elements of fiscal policy are a) Government income and b) Government expenditure The most prominent document that elaborates the Fiscal Policy of Bangladesh is the National Budget passed in the Jatio Sangsad (The National Assembly of Bangladesh) every year. Fiscal Management in Bangladesh Fiscal management one of the big challenges for any government and it is more crucial for a developing country like Bangladesh. So the policy makers need to design fiscal policy very carefully. Maintaining macroeconomic stability and attaining economic growth are the main tasks. So we need to go through the following process to designing and managing fiscal policy: Inflow of money management for government income To maintain its daily activities, i.e. to run the government To ensure protection for the helpless To provide necessary services to people that otherwise nobody would provide (Market failure) To ensure development of the country To build buffer against risk! Outflow of money management for government expenditure To maintain its daily activities, i.e. to run the government To ensure protection for the helpless To provide necessary services to people that otherwise nobody would provide (Market failure) To ensure development of the country To build buffer against risk! building socio-economic and physical infrastructure human resource development and Poverty alleviation. Administrative welfare and Other service oriented activities. Establishing Equity Inequality prevails in all societies. Government tries to reduce the gap between the rich and the poor For this, the government collects taxes from the rich and spends it for the poor

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 Efficiency in resource allocation: Private entrepreneurs may not be interested in investments where return of investment is not good for him but good for the country In this case, the government may step ahead and supply resources for such investments Example: building roads and highways, Public-Private Partnership (PPP) Provision of public goods Check market failure i,e, ensuring price hike. Encouraging agriculture sector. Establishing Agro-based industry to uplift living standard of marginal farmer and creating employment opportunity. Promoting livestock sector. Long term Investment Improving public health. Improving water management. Investing on energy and power sector. Investing on communication system i,e, railway sector. Developing human resource through proper education and training. Addressing clement change issue.

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