Govt spending aimed at appeasing voters, officials jumps

Govt spending aimed at appeasing voters, officials jumps. Prothom Alo file photo
Govt spending aimed at appeasing voters, officials jumps. Prothom Alo file photo

The finance ministry is struggling hard to arrange additional funds to meet the government’s accelerated development expenditure in the election-year, along with other costs.

The government’s desperation to collect money, as reflected in its steps, has led it to sell saving certificates at high interest.

Such steps were taken also in view of a shortfall in revenue earnings by the National Board of Revenue by around Tk 150 billion from its target in the first seven months of the current fiscal year 2017-2018.

In its last year in office, the Awami League government is accelerating expenditure, indirectly to buy votes, according to economist AB Mirza Azizul Islam.

The former finance adviser to a caretaker government told Prothom Alo when the government has increased expenditure, it is not earning enough.

If the costs of Annual Development Programme (ADP) are reduced, the projects there would remain incomplete at the end of the year, he pointed out.

Questions over ADP size

It is a tradition of slashing the ADP size if the projects are not implemented on time. Like previous years, the ADP size has been reduced this year but it has been done tactfully to ‘show off’.

The finance ministry is also facing pressure from other ministries over the revised ADP. The government has decided to pass additional allocation of budget for other ministries after scrutiny and this will later be incorporated into the revised budget.

This year, the ADP outlay has come down to Tk 1575.94 billion, from the original one of Tk 1648.50 billion.

Tons of new projects

The Executive Committee of the National Economic Council (ECNEC) approved around 150 projects in its 18 meetings in the first seven and a half months of the current fiscal year.

Of them, 80 per cent were new projects.

Most of these projects are for constructing roads and bridges. The current ADP had no allocation for these projects, budget documents show. The finance ministry has to allocate money for these projects afresh.

Every ministry has to be given an additional Tk 80 to 100 billion to implement these projects, according to the Planning Commission.

Special allocations for MPs

The government is readying six projects at more than Tk 260 billion, giving members of parliament (MPs) responsibility to determine development priorities in their constituencies ahead of the next general elections at the year end.

For three projects, already approved by the ECNEC, an amount of over Tk 160 billion will be spent for building schools, colleges, madrasas, mosques, and temples in each constituency.

Another chunk of Tk 100 billion under three proposed projects will be awarded to the MPs for construction and development of schools, colleges, madrasas, public toilets, markets and playgrounds.

Finance minister AMA Muhith on Wednesday said a total of 1,000 private educational institutions will soon be brought under the government’s monthly pay order (MPO) facility. The minister sought an allocation of Tk 40 billion for this in the next budget, keeping the election-year in mind.

The government wants to make larger projects visible during the election-year. And so, the ADP size for the Padma bridge, Padma bridge rail link, metro rail, Chittagong-Cox’s Bazar rail link, and Payra sea port would not be slashed. Around Tk 180 billion has been allocated for these five projects.

Car facilities for govt officials

In October last year, the government brought some changes in car use policy for the government employees. As per the new policy, deputy secretary level officials will get Tk three million as allocation to buy cars. They will also get Tk 50,000 monthly for the salary of the drivers and car maintenance. Earlier, joint secretary level officials used to get allowance for cars. At present, there are 1,552 deputy secretaries in the country. The government will need Tk 4.65 billion as loan for cars and Tk 930 million for drivers and maintenance allowance. 

Economists think that the government will have to allocate money in a revised budget for all these expenses.

Planning Commission’s General Economics Division member Shamsul Alam said that though extra money will be needed, this will not disrupt the budget.

He said that in the election, the political government’s expenditure normally increases but the expenditure that was fixed in the budget should be implemented in a proper way. He also said that it is not possible to increase budget and the government needs to improve it efficacy.  He believes that if big projects become visible in the election year, it is good for the country.  

Mirza Azizul Islam said that giving loan to the deputy secretary level government officials is meaningless.

“This will increase government’s expenditure. The policy was taken mainly to woo government officials,” he said.

Expenditure for saving certificates doubled

Government expenditure for the saving certificates has doubled. In the first six months of the current fiscal year ( July- December), the government has to pay Tk Tk 153.45 billion for saving certificates which is almost double than the previous year. In the current fiscal year, the government allocation for saving certificates and profits was TK 291.68 billion. However, in July-December, the government has sold saving certificates worth Tk 391.68 billion which means in six months the government has sold two thirds of the total planned saving certificates. As such, expenditure has increased.    

Pressure on income

Though expenditure is on the rise, there is no increase in income. In the current fiscal, the National Board of Revenue was given a target of Tk 2481.9 billion revenue income, which is a 30 per cent rise from the previous year.

In the first seven months of the current fiscal (July to January), NBR has a revenue deficit of TK 148.02 billion deficit. There is a 15.37 per cent growth in the revenue collection.

Former Bangladesh Bank governor Salehuddin Ahmed told Prothom Alo that the government has taken special projects for the members of parliament for political purposes.

“This is totally unacceptable,” he said.

He said that the contractors of these projects have political backing and they are not focussed on the projects.

He said that expenditure is increasing, not income.

He said that many projects have been taken without necessary scrutiny and the quality of these projects cannot be ensured.  

“This causes waste of wealth. Work that can be done at one taka is being done at four. This is putting pressure on the total economy,” he added.

He said that this is putting pressure on the public and businessmen to supply the necessary funds and this is affecting the previous achievements.

* This report, originally published in Prothom Alo print edition, has been rewritten in English by Mushfique Wadud and Imam Hossain