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Bank & Finance - March 16, 2023

Strict imposition of govt spending

Zarif Mahmud: The ongoing financial crisis has bounded the government to cut all types of allocations including the development activities, foreign trips and car purchase.
In addition to purchase of new cars, all types of ‘C’ category schemes have been suspended. Through this, more strictness has been imposed in the field of government expenditure. In this regard, a circular has been issued by the Finance Department of the Ministry of Finance on Monday, according to related sources.
According to sources, the ban on buying new cars for all kinds of government work has been continued. According to the circular, the purchase of all types of vehicles (motor vehicles, watercraft, aircraft) as new or replacement will be stopped. In the light of the circulars issued at different times to reduce government expenditure in the context of the current global economic situation in addition to the existing policies,these instructions are given in the circular issued by the Finance Department of the Ministry of Finance on the expenditure allocated in the Revised Budget (Operation andDevelopment) of the financial year.
According to the circular, government, semi-government, autonomous, state-owned, statutory, state-owned companies and financial institutions can spend 100% of the allocation shown under the operating budget in the revised budget of the current fiscal year 2022-2023. However, a maximum of 75 percent of the money allocated to the power sector; A maximum of 80 percent of the amount allocated to petrol-oil and lubricants and gas and fuel sectors anda maximum of 50 percent of the allocated funds can be spent on the training sector (excluding training institutes).
In the circular, it is said about the expenditure of the development budget, in the revised budget of the current 2022-2023 fiscal year, under the annual development program under the development budget, 100 percent of the funds allocated to the public sector and 15 percent of the funds allocated to the public sector in the identified projects of the ‘B’ category are reserved below 85 Percentage can be spent. Apart from this, the financial exemption for the projects under ‘C’ category will be suspended until re-ordered.
However, irrespective of the category (A, B and C) projects which are scheduled for completion on 30th June 2023 in the Revised Annual Development Program of the current financial year 2022-2023 and there is no scope for extension, the allocated amount can be spent 100%. No conditions shall apply in this case.
A maximum of 50 percent of the allocated amount can be spent on entertainment expenses, training, travel expenses, other expenses, computers and accessories, electrical equipment and furniture among others. In addition, the maximum 75 percent of the money allocated to the power sector in the development budget as well as the operating budget; A maximum of 80 percent of the allocated funds can be spent on petrol-oil and lubricants and gas and fuel sectors. Besides, purchase of all types of vehicles (motor vehicles, watercraft, aircraft) as new or replacement will be stopped.
According to the circular, the money allocated to these sectors cannot be re-utilized to any other sector and from any other sector to these sectors. Prior to this, circulars were issued on July 3, July 21 and December 13 last year with the aim of reducing public expenditure. In those circulars, various government expenditure sectors are reined in. According to sources in the Ministry of Finance, this new instruction was given in continuation of this.
No expenditure bill will be accepted in excess of the revised allocated amount: The finance department of the Ministry of Finance has sent a letter to the Comptroller General of Accounts last Monday not to accept any expenditure bill in excess of the allocated amount in the revised budget of the current fiscal year 2022-2023.
According to the letter, the detailed breakdown of the revised allocation for the current financial year 2022-2023 has been sent. Against each sector, it is requested not to accept any expenditure bill in excess of the amount allocated in the revised budget of the current fiscal year 2022-2023. However, after the issuance of this authority, additional allocations will be made by the Finance Department in the sectors, those additional allocations will be considered as part of this revised authority.
According to the sources, in the sectors in which additional money has been allocated in the revised budget for the current fiscal year 2022-2023 and will be allocated later, the allocation of money to those sectors will be regularized in due course through supplementary/additional financial statements.
According to the circular, according to the revised authority for the current fiscal year 2022-2023, no consent of the finance department and the administrative ministry/department will be required in the case of exemption of the allocation of the government part of the approved project under implementation by the ministry/department/other institution/department/department. The amount will be automatically deducted. Project managers can use this money directly.
However, in the case of release of project funds of autonomous institutions including revised approved/unapproved projects, the procedure described in the ‘Guidelines for Release and Utilization of Funds for Development Projects 2018’ issued earlier by the Finance Department will remain unchanged.
In a separate circular in this regard, the ministries and departments have been told, in cases where the amount of the original sanction is more than the revised allocation and more money has already been discounted or used than the revised allocation, to immediately surrender or deposit the money in excess of the revised allocation to the government treasury.
The concerned Administrative Ministries and Departments shall send two copies of such surrender/deposit related letters to the Finance Department within the second week of June of the current year. In this case, the letter sent by any directorate, department or subordinate office other than the concerned administrative ministry and department will not be considered by the finance department.

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