It notes: "One significant example is the discrepancy between revenue collection data provided by the National Board of Revenue (NBR) and that provided by the Office of the Controller General of Account (CGA). Part of this discrepancy reflects a timing issue. Taxes are registered by the NBR when they are effectively paid, but they are only booked by the CGA when the amount is deposited into the Treasury Single Account (TSA)."

It says: "If the definition of revenue is exactly the same and the only difference was one of timing, at year-end the numbers should be reconciled. However, this is not the case, and the gap between the two reported series is increasing."

The Paper titled ‘Assessing Fiscal Risks in Bangladesh' defines fiscal risks as factors that can cause a country's fiscal aggregates to differ from forecasts. The factors are often outside a government's control.

According to the Paper, a variety of factors may cause the fiscal outturns in Bangladesh to diverge from forecasts. The fiscal balance is particularly sensitive to shocks to macroeconomic variables such as commodity prices and exchange rates. Additionally, specific factors, such as calls on government guarantees or the recapitalization of state-owned banks could negatively impact fiscal aggregates. Results also highlight the impact of risks derived from the unfunded pension system and the limited institutional capacity.

The analysis in the Paper shows the fiscal balance in Bangladesh is sensitive to macroeconomic shocks, in particular those to commodity prices and exchange rates. It says: "A one standard deviation increase in commodity prices, or a 30 percent devaluation, may raise the deficit by between 0.6 to almost 1 percent of GDP on average per year when compared to the baseline."

The Paper has pitched for full integration of risks into government policy decision-making, both in fiscal management and in the design of an integrated asset and liability management strategy in coordination with Bangladesh Bank.

Another initiative that can mitigate the incidence and impact of fiscal risks is "modernization of the National Saving Directorates by linking of the interest rates on the instrument to market or benchmark securities and though making issuance and record keeping electronic."

The Paper has proposed measures to reduce currency risks in the government liability structure. For example, a cap in the amount of foreign denominated debt as well as on foreign denominated government guarantees, it says.

Yet another fiscal risk-mitigation initiative should be formulation of a full set of policies and procedures for issuance of loan guarantees, as well as prioritization and limitation on the amounts of new guaranteed obligations.