Austerity saves govt Tk15,000 crore
Although the government had a target of saving 20% from fuel and electricity costs, it did not happen due to price hikes
The government has so far managed to save some Tk15,000 crore with austerity in expenses since the beginning of FY23, the Finance Division, in its coordination council meeting on Wednesday, revealed.
Of the amount, Tk1,093 crore came from the allowances of the government employees and Tk14,000 crore from cutting costs in public works and services and investments in shares and equity.
Although the government had a target of saving 20% from fuel and electricity costs, it did not happen due to price hikes.
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The Finance Division data said the austerity measures had no impact on increments and promotions of the government employees. They also received their regular festival allowances. Rather, the cut in employee allowances for meetings and foreign travel helped save money.
In the original budget of FY23, Tk74,266 crore was allocated for salaries and allowances, but it was cut down to Tk73,173 crore in the revised budget. The government is likely to keep Tk77,000, 1.5% of GDP, for the sector in the upcoming budget for FY24.
From public work budgets which are used for buying stationery, chair-tables, computers and other useful items for different ministries and offices, and for making minor repairs of their establishments, the government could save Tk6,470 crore only.
By limiting investment in stocks and equity, it saved Tk7,585 crore. Funds allocated to this sector are used to meet capital shortfalls and invest in equity in various government-owned enterprises.
As part of the cost-saving initiatives, the Ministry of Finance has marked the ongoing development projects into A, B and C categories depending on priorities, and suspended allocations to C-category projects. Besides, the B-category projects have been allowed to spend a maximum of 80% of their allocations. This austerity has reduced the annual development programme size by Tk18,500 crore in the revised budget.
Although the government could save some other small amounts from various sectors, it had to spend these for subsidies to fuel oil, gas and fertilisers to keep their prices affordable against higher imported costs.
The Finance Division said the allocations for agriculture, power and food subsidies have increased by about Tk21,000 crore in the revised budget for FY23. Besides, its expenditure for loan interests has increased for the depreciation of the taka against the dollar, and surges in Libor and SOFR rates.
In the original budget of the current financial year, the allocation for interest payments was Tk80,375 crore, which increased by Tk9,638 crore in the revision. The next budget may allocate Tk1,02,376 crore in debt interest payments.
