The government has, of late, taken several initiatives to ensure that public money allocated for the development projects are spent in a judicious way from the very outset of the new fiscal year, Finance and Planning Ministries sources said.
“As per Prime Minister Sheikh Hasina’s directives, all officials concerned are now very cautious and economical in spending public money on development projects in order to be able to address the financial crisis due to Covid-19,” an official preferring anonymity said.
Economists have also called it a timely move, saying there is no alternative to cost cuts in the present context.
The official added the prime minister directed all to reduce costs for cars, accommodation, procurement, entertainment and foreign tours from a meeting of the Executive Committee of the National Economic Council (ECNEC) held on Tuesday.
“If the unnecessary costs are reduced and all officials involved in various development projects including mega ones become economical in spending public money, it would be possible to save over Tk 40,000 crore,” the official told Bangladesh Post.
He also said a ban has also been imposed on buying cars with government funds till December next.
The government is following the path of cost-cut strategy mainly in view of the declining revenue. Finance ministry sources said the economy was stagnant due to coronavirus. As a result, there has been a huge deficit in revenue.
Meanwhile, it was learnt that various ministries and departments have been instructed to implement the projects under the new Annual Development Program (ADP) with a view to reducing expenditure. A circular in this regard has been issued by the Finance Department of the Ministry of Finance on Wednesday, and it was being implemented from the following day.
The Ministry of Finance has said that in the current fiscal year 2020-21, the disbursement of ‘low-priority projects’ in the ADP will be suspended for the time being. However, the projects of the Health and Agriculture Ministry are not included.
On the other hand, all the ADP projects of those two ministries will be implemented. All other ministries and departments will not be exempted from the implementation of low-priority projects.
In this year's ADP, 30 percent of the total projects have been identified as low-priority ones. The remaining 40 per cent are high priority projects and the remaining 30 per cent are medium priority projects. It may be mentioned that in the ADP of the new financial year, Tk. 2,05,145 crore was allocated against 1,500 projects.
An official at the policy-making level involved in the budgeting of the finance ministry on condition of anonymity said that the ban would be lifted after reviewing the situation if the economy recovers.
The expenditure on implementation of mid-level projects has been dragged down. However, if the expenditure on the implementation of medium-priority projects is considered inevitable, the money can be spent at one's own risk, he added.
