Fuel subsidy leeching pvt sector credit

Footing the fuel bill is leaving the private sector shrivelled and affecting the economy in turn, say economists, reports bdnews24.com. The government has already used up the whole of this fiscal's bank loan target in only four months in order to subsidise fuel imports, thereby affecting loan flow into the private sector. According to economists, the increase in the government's tendency to take bank loans is affecting the economy, including investment in the private sector, and generally leading to an industrial slowdown. Central bank records show that loans given to the private sector in 2010-11 financial year was 25.84 per cent higher than the previous fiscal. But the growth came down markedly in the first quarter of this fiscal, registering a measly 2.84 per cent. "The government is facing an economic crisis only to meet the expenses of providing fuel to the quick rental power plants," former caretaker government's finance advisor ABM Mirza Azizul Islam said. "As a result of the deals made, the government has to buy fuel at a higher price, subsidise it to a large extent, and then supply fuel at lower prices to the plants." According to Bangladesh Bank's data, the government has taken Tk 9.5 billion loan in the first 100 days of the current fiscal to meet its daily expenses. The amount has risen to approximately Tk 18.86 billion in the first four-and-half months, until October 15, of which the central bank has funded Tk 10.74 billion.