Around Tk 2,500 crore set aside in the current fiscal’s budget as
contingency fund and block allocation has been exhausted in less than
five months to meet the demands for additional funds from ministries and
divisions ahead of the election.
Officials in the budget wing of the finance ministry told New Age that
Tk 1,200 crore was spent by October to fund projects taken mostly on
political considerations and to meet additional expenses on account of
payment of dearness allowance, risk allowance for the law enforcement
personnel and the utility bills of the armed forces.
They said Tk 1,300 crore has been spent from block allocation funds and
other pockets to meet additional demands from ministries and divisions
ahead of the general election set for January 5.
The demands for additional funds are still pouring though the budget wing exhausted the funds in the last month.
Last week, LGRD minister Syed Ashraful Islam placed the demand for Tk
200 crore to pay compensations for the acquisition of land for the
proposed water treatment plant at Mawa.
Officials said that the next elected government might face problems in meeting the additional and unseen expenditures.
They expressed the apprehension that budget discipline could be further compromised in coming months.
Such indiscipline in financial management is not a new thing for the
present government, said former caretaker government adviser Mirza
Azizul Islam.
In 2011-12, the national budget came under severe pressure due to
excessive borrowings from banks to pay subsidies on fuel oil,
fertilizers, food.
In the same year, the government borrowed in less than eight months Tk
18,957 crore, the target set for the fiscal, to meet deficits, pushing
the first quarter’s inflation to 11.41 per cent.
The government’s budget management is headed for the same direction
after it borrowed Tk 9,634.11 crore from the commercial banks in first
three months of the fiscal, officials fear.
They anticipate the borrowings would increase to meet the revenue
collection shortfall worth between Tk 10,000 crore and Tk 13,000 crore.
Former Bangladesh Bank governor Salehuddin Ahmed attributed the
deepening financial indiscipline to government excessive expenditures on
politically motivated expenditures at the end of its tenure.
DA for the public servants announced ahead of the election also forced the government to borrow, he said.
He said that such huge borrowings from the banks would push up inflation.
The upshot is: not so favourable business environment with excessive government crowding out private investment, he added. (source)