The government spends billions of taka annually on account of subsidies. Bulk of the same is spent in the form of incentives to exporters and support, both in cash and kind, to the poor and marginal farmers and the underprivileged section of the
population.
However, there has always been a question about the quality of subsidy spending. The allegation that the subsidy, in most cases, does not reach the target group/s because of widespread fraudulent practices has only grown louder over time. But the government has preferred to remain indifferent to the problem.
Several studies, carried out in the recent past, have identified gross irregularities in the distribution of subsidised farm inputs meant for poor and marginal farmers and money for the poor and the distressed people under various safety net programmes. Local level officials and politically influential people do form a nexus to gobble up a part of the same themselves and distribute another part among locals who are rich and do not deserve such benefits.
Such diversion of funds or the government's inability to reach the benefit to the target groups of the population amounts to wastage of resources. A country that finds it hard to mobilise the same in right amount can hardly afford such wastage. Yet under the full glare of the authorities concern the wastage has been going on for years. It is hard to believe whether this would ever be stopped or reduced to a minimum level.
However, there are other forms--- sophisticated ones--- of embezzling government subsidies. One such form is the abuse of the subsidy by a section of unscrupulous businessmen. Allegations have it that some exporters take out more subsidy than the actual amount by doctoring the documents. A few relevant officials do extend their cooperation to this kind of nefarious activity.
But the recent unearthing of a couple of cases of misappropriation of export subsidy has highlighted what the crooked section of businesses did to siphon off the government funds meant to boost exports.
According to a media report, two Dhaka-based business firms between 2011 and 2014 submitted relevant documents with a number of banks showing exports of goods valued at about US$ 3.0 million, equivalent to Tk 240 million in Bangladesh currency, and claimed the subsidy given to exporters under government rules.
The banks concerned disbursed subsidy money worth Tk 22.8 million against the export earning of $1.5 million. However, the foreign exchange inspection department could detect some foul play prior to the disbursement of another amount, around Tk 20 million, against the export revenue worth over $1.4 million.
In fact there had been no physical movement of goods---powdered spices, fruits and vegetables as shown in the export letters of credit--- out of the country to their destination-the United Arab Emirates.
But what was most surprising was that the money shown as export receipts had entered the country through formal banking channel. Documents submitted with the banks contained the names of importers and the exchange houses used for remitting the export
proceeds.
However, investigation conducted later failed to locate the so-called exporters. It was also detected that all the documents submitted by the 'business' firms were forged ones.
It remains a mystery as to how such cases of forgeries could escape the notice of the bank officials concerned. The forged documents should have raised suspicion in their mind. Many tend to believe that an unscrupulous section of bank officials were involved in the forgeries.
The central bank has now decided to refer the names of the business firms to the Anti-corruption Commission (ACC) for investigation. Since an earlier probe had failed to locate the 'exporters' concerned, any result out of the ACC probe is unlikely.
However, there were similar cases of forgeries in the past. The infamous Bismillah Group had been involved in the worst case of forgeries. The group and its sister concerns---mostly fakes--- embezzled bank loans and export subsidies worth over Tk 11 billion between 2006 and 2012 from different banks. Banks made available substantial amount money to the Group as LTRs (loan against trust receipts). Besides, it had taken away a big amount of money as export subsidy despite the fact that all the export documents were forged.
So, a big amount of money kept in the national budget to disburse as subsidy either to promote exports or to lessen the financial burden of poor consumers on account of utility services or to support the poor farmers and underprivileged sections of the population goes down the drain. Some influential people, politically or otherwise, and the crooks at the grassroots and in business do not allow a big chunk of the subsidy money to reach the people who deserve the same most. However, the government does not seem to be concerned at all about the developments.
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