An analysis of fiscal autonomy of local government in Bangladesh: Challenges and potentials

Abstract

<p style="text-align: justify;"><em>The term &lsquo;Local Government&rsquo; is an age-old concept in Bangladesh. The function and formation of local government in this region have gone through several changes and reforms. At present, five local government tiers are functioning in urban and rural areas of Bangladesh. This study has tried to bring the comparative scenario of fiscal autonomy of two tiers of both urban and rural local government. Fiscal autonomy can be referred as financial decentralization. Fiscal autonomy means liberty in budget making, financial resource allocation and mobilization. To find out the level of financial decentralization, comparative data has been analyzed among the Zila Parishad, Upazila Parishad, and Union Parishad at rural area and Pouroshava, city corporation at urban area. This study is conducted in inductive approach with qualitative method of analysis. Random sampling is used to choose the respondents and unified structured questionnaire is used to collect the data. This study tried to focus on specific challenges of fiscal autonomy of upazila Parishad at rural area and Pouroshava at urban area. Though the term financial decentralization has been long cherished concept in our local government, conceptualization and localization of this system are yet to be addressed. That is why this study focuses on some indicators to measure the level of fiscal autonomy. Moreover, there are confusions like- scuffle of status, which may result in overlapping at budget making procedure, revenue collection etc. There are also confusions regarding population size and area, etc. This study argues that, the practice of fiscal decentralization in all the tiers is less than desirable level. In affairs of financial management, they enjoy limited authority. It also explored that though the scope of revenue generation is limited due to some legal and socio-political factors, there are still some untapped potential resources also.</em></p>

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