Govt to continue with austerity measures
Thursday, 16 August 2007
FE Report
The government, in its efforts to cope with the flood-related expenditure, has decided to continue with the austerity measures that helped it save a large amount of money in the past.
Official sources said the Ministry of Finance (MoF) has decided to seek approval of the Chief Adviser to take up the austerity measures this year also.
The measures generated savings worth nearly Tk 7.0 billion in the past two fiscal years.
"The amount to be saved following the austerity measures in the current fiscal will be used for rehabilitation of the flood affected schools and educational institutions," a senior ministry official said.
Earlier, the caretaker administration took a move to discontinue the austerity measures as most of the ministries and divisions were opposing the formula of cutting down unnecessary budgetary expenses.
Now it has become imperative for the present government to reduce unnecessary budgetary expenses and divert the money to flood rehabilitation programme, the official added.
The MoF had introduced 16-austerity measures relating to development and the non-development expenditures in fiscal 2005-06 against the backdrop of global economic recession.
Among the measures, the most significant one was imposition of a ban on procurement of new cars for projects.
This year's flood has already caused damage to crops and vegetables worth about Tk 6.0 billion.
According to a preliminary estimate of the ministry of agriculture, rice crops and vegetables on an area of about 0.1 million hectares have been totally damaged by the flood.
The last time, the country faced flood in 2004.
More than half of the country was flooded and the damage was estimated at US$ 2.0 billion in that year when the agriculture production loss was calculated at about $500 million.
However, the government bodies are yet to make a complete assessment of the extent of damage to roads, culverts, infrastructure and livestock of 54 flood-hit districts in the current year.
The proposed austerity measures also include of 10 per cent cut in fuel supply to ministries, their divisions, departments and bodies.
The new proposal on austerity measures, however, dropped the provision of 10 per cent cut in entertainment and miscellaneous expenditures of both development and non-development budgets, sources said.
Under the same proposals, the ministries and divisions will be asked to be cautious in using telephone, water, electricity and gas to curb misuse by the ministries, their divisions and departments.
The government, in its efforts to cope with the flood-related expenditure, has decided to continue with the austerity measures that helped it save a large amount of money in the past.
Official sources said the Ministry of Finance (MoF) has decided to seek approval of the Chief Adviser to take up the austerity measures this year also.
The measures generated savings worth nearly Tk 7.0 billion in the past two fiscal years.
"The amount to be saved following the austerity measures in the current fiscal will be used for rehabilitation of the flood affected schools and educational institutions," a senior ministry official said.
Earlier, the caretaker administration took a move to discontinue the austerity measures as most of the ministries and divisions were opposing the formula of cutting down unnecessary budgetary expenses.
Now it has become imperative for the present government to reduce unnecessary budgetary expenses and divert the money to flood rehabilitation programme, the official added.
The MoF had introduced 16-austerity measures relating to development and the non-development expenditures in fiscal 2005-06 against the backdrop of global economic recession.
Among the measures, the most significant one was imposition of a ban on procurement of new cars for projects.
This year's flood has already caused damage to crops and vegetables worth about Tk 6.0 billion.
According to a preliminary estimate of the ministry of agriculture, rice crops and vegetables on an area of about 0.1 million hectares have been totally damaged by the flood.
The last time, the country faced flood in 2004.
More than half of the country was flooded and the damage was estimated at US$ 2.0 billion in that year when the agriculture production loss was calculated at about $500 million.
However, the government bodies are yet to make a complete assessment of the extent of damage to roads, culverts, infrastructure and livestock of 54 flood-hit districts in the current year.
The proposed austerity measures also include of 10 per cent cut in fuel supply to ministries, their divisions, departments and bodies.
The new proposal on austerity measures, however, dropped the provision of 10 per cent cut in entertainment and miscellaneous expenditures of both development and non-development budgets, sources said.
Under the same proposals, the ministries and divisions will be asked to be cautious in using telephone, water, electricity and gas to curb misuse by the ministries, their divisions and departments.