Govt spending to cover SoEs' losses may double in FY'25

Government spending to cover net losses of state-owned enterprises (SoEs) is likely to double in the next fiscal year compared to the current budget, according to sources.
The government forecasts that 49 SoEs may incur a total loss of Tk 280.47 billion in the next fiscal year, compared to a projected loss of Tk 149.62 billion in the current year.
However, the revised budget for the current fiscal year now estimates a net loss of Tk 59.89 billion.
Finance Division officials involved in budget preparation said that SoEs made a profit of Tk 1.38 billion in fiscal year 2022-23.
This year's projected net loss is attributed to the global economic slowdown caused by the war in Ukraine, high global inflation and the devaluation of the local currency Taka.
These factors are expected to drive losses for 12 SoEs totaling Tk 193.95 billion, while the remaining 37 SoEs are expected to generate a combined profit of Tk 134.05 billion, resulting in a net loss of Tk 59.89 billion in the current fiscal year.
Looking ahead to the next fiscal year, Finance Division officials predict that SoEs may earn a total of Tk 4.01 trillion, while their total expenditures may reach Tk 4.29 trillion, leading to a projected net loss of Tk 280 billion.
The non-operating expenditure of the SoEs is estimated at Tk 136.85 billion, which includes Tk 1.18 billion payment to the labour fund, Tk 80 billion interest payment and Tk 55.27 billion direct tax payment.
According to estimates, mills under the Bangladesh Textile Mills Corporation (BTMC) are projected to incur a net loss of Tk 148.7 million, while mills under the Bangladesh Jute Mills Corporation (BJMC) are expected to see a net loss of Tk 2.47 billion.
On the other hand, nine units under the Bangladesh Steel and Engineering Corporation (BSEC) may generate a net profit of Tk 1.03 billion and 15 mills under the Bangladesh Sugar and Food Industries Corporation (BSFIC) may incur a net loss of Tk 2.90 billion.
Looking ahead to the next fiscal year, industrial units under the Bangladesh Chemical Industries Corporation (BCIC) are estimated to make a net loss of Tk 13.35 billion. In contrast, rubber mills under the Bangladesh Forest Industries Development Corporation (BFIDC) are expected to generate a net profit of Tk 73.31 million.
In the next fiscal year, the net loss of the Bangladesh Power Development Board (BPDB) is estimated to triple, reaching Tk 181.06 billion compared to Tk 61.17 billion in the current fiscal year.
A senior finance ministry official told The Financial Express that a significant portion of revenue earnings is currently being used to offset the losses incurred by the state-owned enterprises.
"Many of these SoEs have been making losses for years, and these losses are increasing annually. This trend needs to be stopped," he said.

[email protected]