The finance ministry is likely to withdraw the austerity measures enforced since 2005-06 fiscal in the wake of high fuel prices, said ministry officials Tuesday.
A proposal seeking discontinuation of the cost cutting measures is now awaiting the approval of the finance and planning adviser Mirza Azizul Islam.
The finance ministry has taken the move following requests from other ministries and divisions which suggested withdrawal of the austerity measures as some of the expenses are essential especially in the present market situation, said a senior finance ministry official.
A total of 16 steps, including 10 per cent cut in fuel supply to ministries, divisions, departments and bodies, were imposed since September 2005 as part of the austerity measures.
The measures also included halving the entertainment cost and ban on procurement of new cars for projects in the wake of price hike of petroleum products globally.
During 2004, the price of a barrel of crude oil rose above US $40. A series of events led the price of crude oil to exceed $60 by August 11, 2005.
As of Monday, crude oil was traded at $120.
The ministries and divisions were also asked to be economical in using telephone, water, electricity and gas to curb the misuse as per austerity steps which helped the country save annually an estimated amount of Tk 5.0 billion for the last three fiscal years.
Another official said the amount is equivalent to 12 per cent of the losses incurred by the state-owned entities annually.
"Such austerity measures are useless when the losses of the state-owned entities are growing every passing year," said the official.
The official said the most effective measure to offset the price hike of fuel will be reducing the losses of the state-owned enterprises.
Last September, the finance ministry took a similar move to withdraw the austerity measures. But it had to change its stance due to floods in July 2007.
Moreover, a decision to utilise the amount saved from the austerity measures in rehabilitating schools and educational institutions in flood affected areas was taken.
