Govt saves Tk 530m from food subsidy
Shakhawat Hossain | Sunday, 15 June 2008
The caretaker government has saved Tk 530 million (53 crore) from the projected allocation of Tk 7.86 billion on 'subsidised food' in the outgoing fiscal despite extending the food relief operation to cover general people also, ministry officials said.
A record 0.35 million tonnes of rice were sold out under the food relief operation in the outgoing fiscal to shield the urban and rural poor people against more than 70 per cent price hike of the staple food in the local market.
An apprehension within and outside the government was that the bill on 'subsidised food' will bloat the budgetary projection due to the extended relief operation through two rounds of open market sale (OMS) and BDR-run 'dal-bhatt' programmes.
The provisional calculation, however, suggests that the government managed to run the food relief operation for the most volatile year in the recent past at a cost of Tk 7.33 billion, thanks to the food and disaster management ministry's policy of enhancing the rice price by some Tk 7 per kg.
More than 60 per cent of the distributed 0.35 million tonnes of rice were provided from the last fiscal's buffer-stock. The procurement price of per kg rice was Tk 18 in the last fiscal year.
The upward adjustment of the rice price by Tk 7 per kg at the recommendation of the food and disaster management ministry has helped the government to avoid additional expenditure on 'subsidised food'.
On the other hand, the caretaker government provided a fund worth Tk 7.0 billion to the cash-starved Bangladesh Petroleum Corporation (BPC) for fuel oil import in the same fiscal, the finance ministry official said.
The fund came through the local stock markets as stakes of Meghna and Jamuna, two state-owned fuel oil distributing companies, were offloaded.
Yet, the government had to count more than Tk 60 billion in losses on account of importing some 3.5 million tonnes of fuel oils by the BPC due to the government policy not to adjust the price of the item.
The government last adjusted prices of fuel oils in the local market more than one year back when the price per barrel crude oil was US$ 64 in the international market.
The caretaker government also provided subsidy almost double the projected Tk 22.00 billion for marketing urea and other fertilizers in the local market.
It had to operate two rounds of OMS- first in September-October and then in January-May-and distributed about 0.3 million tonnes of rice through 250 shops across the country, 100 of them in the capital city.
There was a BDR-run parallel food relief operation, dubbed 'dal-bhat' programme, under which it distributed about 53,000 tonnes of rice through its limited outlets in the capital.
The government provided Tk 1.15 billion as interest-free loan to the BDR for the purpose.
A record 0.35 million tonnes of rice were sold out under the food relief operation in the outgoing fiscal to shield the urban and rural poor people against more than 70 per cent price hike of the staple food in the local market.
An apprehension within and outside the government was that the bill on 'subsidised food' will bloat the budgetary projection due to the extended relief operation through two rounds of open market sale (OMS) and BDR-run 'dal-bhatt' programmes.
The provisional calculation, however, suggests that the government managed to run the food relief operation for the most volatile year in the recent past at a cost of Tk 7.33 billion, thanks to the food and disaster management ministry's policy of enhancing the rice price by some Tk 7 per kg.
More than 60 per cent of the distributed 0.35 million tonnes of rice were provided from the last fiscal's buffer-stock. The procurement price of per kg rice was Tk 18 in the last fiscal year.
The upward adjustment of the rice price by Tk 7 per kg at the recommendation of the food and disaster management ministry has helped the government to avoid additional expenditure on 'subsidised food'.
On the other hand, the caretaker government provided a fund worth Tk 7.0 billion to the cash-starved Bangladesh Petroleum Corporation (BPC) for fuel oil import in the same fiscal, the finance ministry official said.
The fund came through the local stock markets as stakes of Meghna and Jamuna, two state-owned fuel oil distributing companies, were offloaded.
Yet, the government had to count more than Tk 60 billion in losses on account of importing some 3.5 million tonnes of fuel oils by the BPC due to the government policy not to adjust the price of the item.
The government last adjusted prices of fuel oils in the local market more than one year back when the price per barrel crude oil was US$ 64 in the international market.
The caretaker government also provided subsidy almost double the projected Tk 22.00 billion for marketing urea and other fertilizers in the local market.
It had to operate two rounds of OMS- first in September-October and then in January-May-and distributed about 0.3 million tonnes of rice through 250 shops across the country, 100 of them in the capital city.
There was a BDR-run parallel food relief operation, dubbed 'dal-bhat' programme, under which it distributed about 53,000 tonnes of rice through its limited outlets in the capital.
The government provided Tk 1.15 billion as interest-free loan to the BDR for the purpose.