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Bangladesh - November 28, 2023

Govt is on a cost-effective policy with revised budget

Mahfuja Mukul: The government has taken the policy of cost reduction in the budget of the current fiscal year 2023-24. It will remain in force even in the formulation of revised budget. Therefore, the Ministry of Finance has told various ministries, departments and departments that no additional allocation can be requested in the revised budget. Apart from that, the revised budget for the current financial year should be formulated following the steps already taken to save costs.
Finance Department of the Ministry of Finance issued a circular for the preparation of the revised budget for the current financial year and gave this instruction. It is said that to ensure the best use of limited resources by allocating necessary funds to the government’s priority sectors, it is necessary to formulate a ‘revised budget’ to ensure proper and timely implementation of the current fiscal year budget of all ministries, departments and other departments under the medium-term budget framework system.
The circular said that the amount allocated in the original budget of the current financial year, the expenditure limit (operations and development) should be kept the same in the revised budget. No additional allocation can be claimed in any way in the revised budget. But sector-wise allocation can be reduced or increased from the money allocated for the implementation of priority-based activities to achieve the policy and objectives of the concerned ministry. However, if the development budget money is unspent, it cannot be transferred to the management budget.
The size of the budget for the current financial year is Tk 7 lakh 61 thousand 785 crores. Out of this, the size of the annual development program is Tk 2 lakh 77 thousand 582 crores. Finance department officials have started working on the revised budget keeping in mind cost reduction. The revised budget will be finalized in the resource committee meeting to be held next April.
The circular said that the purchase of all vehicles of government, semi-government, autonomous, state-owned companies and financial institutions should be stopped. However, under the operational budget, money can be spent with the approval of the Ministry of Finance in case of replacement of vehicles older than 10 years.
As part of government spending cuts, it was decided not to spend more than 80 percent of the allocated money on the energy sector and 75 percent on the power sector. At the same time, the money allocated in the management budget for the land acquisition sector will be stopped. However, in the case of spending money under the development budget in this sector, it can be spent with the prior approval of the finance department. Funds allocated to these four sectors cannot be transferred to any other sector. Under the management and development budget, all types of foreign travel of government officials and employees will be stopped. However, in case of necessity, limited travel abroad may be permitted with the approval of appropriate authorities.
In terms of revenue collection, it is said in the circular of the finance department that the revised budget should be estimated considering the revenue collection trend of the first six months of the last two fiscal years and four to five months of the current fiscal year. Allocation should be sought in the revised budget based on the actual expenditure of three months of the current financial year in the salary and allowances sector.
The Finance Ministry has said that the revised annual development program will also have to follow new guidelines for expenditure. Funds cannot be proposed for unapproved projects. At the same time, the number of projects in ADP should be limited and less important projects should be eliminated. Apart from this, no unallocated project can be kept in the revised ADP. However, in the projects which will be completed in the current financial year, the necessary funds should be kept. In the case of foreign aided projects, the money received from foreign sources can be spent in full. In this case, the necessary allocation should also be kept in the government sector.
Cyclone, post-flood rehabilitation projects are said to be prioritized. It has also been mentioned that priority should be given to inclusion of all contracted projects in the revised ADP. Allocation of area wise projects should be ensured in the revised ADP. Apart from this, it has been said to exclude the allocation from the slow projects and give the allocation according to the need for the important projects with fast implementation speed.
Officials of the Ministry of Finance say that the government has taken various cost-saving measures in the last few financial years due to the fragile global economic situation due to Corona and Russia-Ukraine war. In continuation of this, many cases will be cut and allocated in the revised budget of the current financial year.

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