Public Consultation in the Local Budget Process in Bangladesh: Open Budget Session


In Bangladesh, Union Parishads (UP), the lowest level of the local government, are obliged to prepare and present their budgets to local people in an “open budget session”. The annual income and expenditure statements of the Union Parishad are generally presented at this open budget meeting along with the succeeding year’s income and expenditure plan. The respective UP chairman announces the budget of the UP in front of local people. People can raise questions, queries and make comments on any of the issues of the proposed budget and plan.

This practice illustrates the principles of timeliness, respect for self-expression, inclusiveness, and depth; and to a lesser extent openness, sustainability and complementarity.

Basic Facts

Under Open Budget Session in Bangladesh, public consultation takes place at the first stage of the fiscal policy cycle: that is at the budget formulation stage. In its present form, it can be labeled as a top down approach and always initiated by the executive Branch (the Union Parishad). Also, the consultation takes place at the local level. A study reveals[1] that around 80% of the Unions seem to hold the open budget meeting, although the quality of the budget document is not known.[2]


As discussed before, the purpose of the open budget session is to discuss and debate the Union Parishad budget during Ward Sabha (citizen gathering), to ensure the accountability of local government through citizen centric validation of schemes and development agendas through citizen’s voices. Ward Sabha is a citizen gathering, constituted of all individuals enlisted in the voter list of a ward.

This practice falls within the context of a process of decentralization of administration that gave place to the the system of rural local government in Bangladesh, the Upazilla Parishad. The local government Ordinance 1982, provided details on the structure and functions of the Upazilla.

One of the most significant current policy initiatives in Bangladesh is the decentralization of administrative in order to ensure implementation of development activities which affect their lives. As the first step towards this process, the 480 [2] of the country have been upgraded in to Upazillas with functional and financial powers.

The Upazilla system has been playing significant Role in ensuring public participation in mass level, which is consider as key of democracy. It can ensure the accountability.

Box 1. Brief background of the Union Parishad budget


1.     Bangladesh has a three-layer local government system: District, Upazila Parishad (Sub-district) and Union Parishad.

2.     Budget at Upazila level can be divided into two categories. Revenue head and development head.

o   Revenue Head: By analyzing revenue income and expenditure of Upazilas, it has been observed that the main earning comes from lease of marketplace/pond/water bodies, which constitutes about 41% of total revenue income in 2010-11 and 46% in 2011-12. The next big source of revenue income in 2010-11 and 2011- 12 was income from house/office rent (26%). The other sources of income include land development tax (2%), tax from business entities (3%) and tender schedule sell. On the other hand, major revenue expenditure heads are honorarium of Upazila chairman and vice chairs and salary of Upazila staffs (12.5% vs 24% of total expenditure in 2011), provident fund (20% vs 4%), office and building repair (14.5% vs 8.3%), and vehicle maintenance, repair and fuel cost (9.68% vs 1.21%).

o   Development Head: Upazilas’ main source of development fund is development grants (ADP) from the central government (about 90% of the total development fund). Other sources constitute very little of the fund. Examining development expenditures of the Upazilas, it was observed that major expenditure head is the infrastructure (both physical and socio-economic heads), followed by agriculture and irrigation, education, health, and disaster and relief. Studies have shown that revenue income has been found to be 48% of development expenditures (ADP).

Upazila Parishad has discretion for the use of ADP. In its revised budget of FY2013-14, the Government of Bangladesh allocated BDT 3.3 billion as Block Allocation for Development Assistance to Upazilas. This equals to BDT 6.762 million per Upazila Parishad on average.

3.     Budget of Union Parishad:

The Union Parishad’s financial resources come from several sources: internal revenue, block grants from the government and the World Bank-supported Local Government Support Project (LGSP) II, and other donor agencies. The government block grant is mainly used to cover the salaries, honorarium and TA&DA of the Union members and employees, office maintenance and operational expenditures, etc. ADP is used for the development purposes. The LGSP II fund is a block grant, with the assistance by the World Bank, provided directly to the Union Parishads for the implementation of development projects. The budget for 2014-15 of the Garinda Union Parishad in Tangail Sadar Upazila, Tangail District, is shown in the following table as an example.

Sector Fund (Unit (BDT)
Preliminary Balance 50,000.00
Cash in Hand 500
Savings in Hand 49,500.00
Total Preliminary Balance 50,000.00


Tax Collection 250,000.00
License & Permit Fees by UP 40,000.00
Leasing Fee Received 25,000.00
Non-instrumental vehicle License 0
Fee/Registration fees 40,000.00
Revenue from Asset


Government Grant for foundation/Establishment Activities 682,200.00
Transfer fee for immobile asset 1% 1,300,000.00
Governmental Grant


LGSP 2 1,500,000.00
ADP 300,000.00
Other Sources (PRDP 2) 275,000.00 275,000.00 135,963.00 275,000.00
Others 87,800.00
Total Received 4,550,000.00

In terms of expenditure, the government block grant is mainly used to cover the salaries, honorarium and transportation allowance and daily allowance (TA&DA) of the Union members and employees, office maintenance and operational expenditures. The Annual Development Program fund is used for the development purposes.

Source: Japan International Cooperation Agency, The Study of the Upazila Governance and Development Project in the People’s Republic of Bangladesh Final Report, February 2015, p. 45-


Authorizing Environment

The Union Parishad Act of 2009 (Section 57, subsection 2 of the Act) has mandated the holding of Open Budget Meetings at the Union Parishad level. [3]  The Union Parishad or UP constitutes of people’s representatives through direct voting. Under each Union, there are nine wards. Nine members are elected from each ward and one seat is reserved for women for each of the three wards. According to the Local Government (Union Parishad) Act, 2009, every ward must hold at least two ward-level open meetings. A Ward Shabha shall consist of the persons enlisted in the voter list of the respective ward. The meeting has a quorum of 5% (one-twentieth) of the voters of the ward. The legal provisions state that the UP chairperson must ensure the ward-level open budget meeting, the meeting must be chaired by the concerned ward member and the member with the reserved seat must act as an advisor to the meeting. This is where the constituency of the ward put forward their grievances and demands. Some of the Ward Shabha’s functions include prioritizing the demands of the citizens that need to be actualized into schemes or projects in their areas and creating lists of beneficiaries concerning welfare-related programs. For instance, the rules specify forming Standing Committees[4] at the ward level for old age welfare allowance where the concerned ward member is the chairperson and the woman member (whose seat is reserved) is the advisor to the Committee. [5]

Recent reforms of 2011 introduced mandatory mechanisms for citizen participation in local government. This included citizen charters, ward assemblies, five-year plans and the right to information (Union Parishad Act , 2009).

Who and How

As per UP Act 2009, the Unions are obliged to hold open budget meeting twice every year, once in February and once in April.

Step 1: Pre-budget Meeting in February: During the pre-budget meeting in February, the Ward Shabha needs to propose projects, prioritize schemes and development programs and review Union Parishad reports and identify shortcomings. The list of priorities received from the Ward Shabha is intended to constitute the basis of the Union Parishad’s budget.

Step 2: Based on the input received from the pre-budget meeting in February, the UP is supposed to form a Sub‐committee to formulate /draft budget proposal.    The Committee needs to draft a budget proposal by reviewing the two instruments (a) Last year’s actual receipt and expenditure and (b) Five year plan document of the UP and last year’s plan implementation status .  The sub‐committee on Budget invite budget proposal from all sectorial Standing Committees and finalize the draft by conserving the SC proposals. The committee proposes the draft budget in a special session of the UP and the UP finally approve the budget for placing at Open budget session.

Step 3: Meeting in April: During the meeting in April, this budget needs to be presented to standing committees and local people in open budget sessions. The intention is that if any decision taken by the Ward Shabha, during the pre-budget meeting, is not adopted in the final list of the UP, it must be justified or explained during this meeting[6].

Step 4: Also, as per law, a follow up meeting needs to be organized in mid of the year. These meetings should take place with at least 5% of voters present.

However, multiple studies have shown that in reality, open budget meetings are happening once in a year, instead of twice, as mandated in the Union Parishad Act of 2009. Open budget sessions generally happen in April and three things happen during sessions: 1) UP officials read out the revenue and expenditure amounts of the last financial year along with the list of government programs implemented last year. 2) UP officials also share the income and expenditure proposal for next financial year and its allocation for different activities. 3) Citizens raise questions, queries and make comments and suggestions on any of the issues of the proposed budget and plan. After the open meeting, based on these suggestions, some changes are made in the proposed budget and a final budget is prepared by the Union Parishad.

Results and Impact

The key findings based on a study conducted by Journey for Advancement in Transparency, Representation and Accountability (JATRA[7]) in 15 unions , mentioned that  on average, a total of 383 people participate in each Open Budget Meeting, of which 60% came from poor and marginalized households, 48% of which were female. On average, 15 issues were raised by the citizens in each ward. Out of these, 51% were demanded by poor and marginalized people, of which 19% were from women. Local CSOs were also present during most of the open budget sessions.

The case study could not find any nation- wide process or impact evaluation report to describe how the initiative is functioning and what its impacts are. A study by Japan International Cooperation Agency (JICA) in 2015 –prepared to assess the feasibility of the Upazila Governance and Development Project, which is aimed at supporting “Bangladesh’s comprehensive decentralization measures that strengthen Upazila as a pivotal local government institution, promote needs-based rural infrastructure development and provide better service delivery to the local communities” reveals that around 80% of the Unions seem to hold the open budget meeting, although the quality of the budget document discussed during the meeting is not known. Also the findings from the same study revealed that some of the actual budgets prepared by the Union Parishads do not satisfy the standard in terms of details and content, as set out in the law. According to the report, in most cases, there is a scope for improvement in the budget document published by the Union Parishad as the full budget is not often discussed. Also, these open budget sessions were used as a platform for providing an opportunity for community people to participate in the dialogue with local authorities.

Recently, a cross-sectional study was conducted in Nabigonj Municipality of the Habigonjin district. Both social survey method and in-depth interview have been applied for collecting data from the respondents in the study area. The findings asserted that the level of scope of participations was very low in this area but the majority (55.3%) of people was highly positive about the initiation to open budget meetings as a form of public participation in the budget process in Bangladesh. This study also reveals that understanding of participatory budgeting as a concept that leads to improve governance is still very limited and citizens were incapable of contributing productively to policy-making within the Nabigonj Municipality[8].

Lessons Learned

  • New legal requirements in this field may well not be implemented.
  • Many of the activities included as part of open budget meetings need important preparation, such as the review of reports, the identification of shortcomings, the preparation of project propositions. Other activities need follow up, such as the participation in the realization of UP development activities. This requires a lot of capacity building support for citizens for effective implementation of the process.
  • Given lack of capacity of citizens and/or lack of culture of interaction between citizens and officials, and lack of incentives for officials to comply with the law, it is likely that compliance will be limited and have little impact. In this case it may be that officials just hold the second meeting, where they announce what the budget will be, with little scope for citizen inputs to influence the decisions.With only one public budget meeting in a year, people are only able to provide inputs to the planned budget, but do not a get chance to question the final commitments the UP members make, in terms of the use of budget planning and the prioritization of development projects.
  • In many instances, these open budget meetings remain inoperative for less participation of the people, lack of prepared agenda and publicity, negligence of public representatives and lack of budget. Thus, there is a need for monitoring arrangements to be put in place so information is available on actual practices and levels of compliance, and to strengthen incentive for officials to comply.
  • The small allocations per ward coupled with delays and uncertainties of receiving funds from the center serve as a discouraging factor for UP officials to reach out for greater public participation during open budget meetings.
  • In many instances, Union Parishad representatives place the development agendas themselves and selected beneficiaries for projects from their patronage. Lack of knowledge and capacity to raise voices against decisions of public authorities limits the effectiveness of the meeting of citizens[9].

Principles of Public Participation in Fiscal Policy

The open budget meeting process illustrates a number of the principles of public participation in practice. The project promotes timeliness, respect for self-expression, inclusiveness, and depth; and to a lesser extent openness, sustainability and complementarity.

  • Respect for self-expression: Since Ward Sabha work at the level of local community, they enable communities and individuals to express their interests in their own way.
  • Inclusiveness: The Open Budget Meetings process aims to be inclusive of all groups through inviting all local CSOs as well as representatives of other sectors to participate in the meeting.

Other principles illustrated that could be improved:

  • Openness: the legal framework (section 4 of this case) sets out with some clarity the process, time line, relevant bodies and committees, functions, rules for who attends, quorum. This principle is weakened when practice does not necessarily follow the law.
  • Sustainability: the fact that this practice is embedded in a decentralization process –thus, part of a wider development and governance strategy – gives it an element of sustainability. Moreover, including detailed requirements in the law makes it harder to ignore the requirements in the second year. According to some of the studies cited, it appears that there is some substantive activity taking place in some UPs each year. However, sustainability needs to be increased by adding a monitoring mechanism, and perhaps a reporting mechanism, with some consequences for non-compliance.
  • Complementarity: the mechanism appropriately introduces an element of direct citizen input, but leaves the final decisions on budget preparation to the UPs. It adds a means for citizen inputs and priorities while leaving the current constitutional arrangements in place.

Country Context

a. Type of government: Thelegislature of Bangladesh is unicameral. It has a Parliamentary System. Politics of Bangladesh takes place in a framework of a parliamentary representative democratic republic, whereby the Prime Minister of Bangladesh is the head of government. Executive power is exercised by the government. Legislative power is vested in the parliament, which is unicameral. The 300 members are elected by universal suffrage at least every 5 years. It consists of 350 members at present. There is universal suffrage for all citizens at the age of 18.

b. Civic space: Today in Bangladesh, mainstream civil society organizations (CSOs) are mostly philanthropic groups, citizen coalitions, and private voluntary agencies.  Many CSOs seek to serve under-served or neglected populations, to expand the freedom of or to empower people, to engage in advocacy for social change, and to provide services.  The exact number of CSOs in Bangladesh is unknown.  According to one estimate, the number of CSOs registered with various governmental authorities totals 250,000.  Among these, it is estimated that less than 50,000 organizations are active.[10] Bangladesh has gained momentum in participatory local governance development over recent years.

The country was established as a parliamentary democracy, but then was under military rule until 1991 when a democratically elected government was reinstated. Fluctuating regime, party, and caretaker government control have led to a series of local government system reforms with greater success in recent years to create deeper participatory local governance. Mandatory mechanisms for citizen participation in local government have been introduced in recent reforms (2011). This included citizen charters, ward assemblies, five-year plans and the right to information (Union Parishad Act , 2009).  Additionally, the Right to Information Act was enacted in 2009.

c. Open Budget Survey Scores[11] – Bangladesh’s score of 56 on the 2015 Open Budget Index is largely the same as its score in 2012. Since the 2012 Survey, Bangladesh has published two new budget documents – the Citizens Budget and the Year-End Report. However, due to refinements made to the 2015 questionnaire, which include new and improved questions that aim to better measure transparency (see the Technical Note for details), Bangladesh’s 2015 Open Budget Index score is largely the same as its score in 2012. Bangladesh’s score of 23 out of 100 indicates that the provision of opportunities for the public to engage in the budget process is weak. This is lower than the global average score of 25. In Bangladesh, the legislature provides adequate oversight during the planning stage of the budget cycle and weak oversight during the implementation stage of the budget cycle. The Executive’s Budget Proposal is not provided to legislators at least three months before the start of the budget year, and the executive does not receive prior approval by the legislature before implementing a supplemental budget. Moreover, in both law and practice, the legislature is not consulted prior to spending any unanticipated revenue or spending contingency funds that were not identified in the Enacted Budget.