Why did the initiative to reduce vehicle expenses for govt officials fail?

The Finance Ministry took an initiative to reduce the maintenance expenses for vehicles purchased with interest-free loans for government officials from Tk 50,000 to half.

However, facing strong objections from the administration, this decision had to be reversed within a week.

Questions have now arisen within the government as to why such an initiative was taken and why it had to be withdrawn.

The Finance Ministry's initiative to reduce vehicle maintenance costs has put the government in an uncomfortable position and created a debate within the administration.

Multiple policymakers have told Prothom Alo that some "over-enthusiastic" officials from the Ministry of Finance attempted to portray themselves positively to the government by implementing this measure. They did not consider what kind of reaction reducing maintenance expenses for government officials' vehicles might provoke.

There are also comments suggesting that this incident signals a surrender to the bureaucracy.

Multiple attempts were made to reach Md Khairuzzaman Majumdar, Secretary of the Finance Division of the Ministry of Finance, by phone for comments on this matter, but he did not respond.

In addition to reducing vehicle maintenance expenses, the proposal from the Ministry of Finance also suggested offering educational leave instead of deputation to officials receiving full scholarships. Both issues have caused dissatisfaction within the administration.

Several sources from the Ministry of Public Administration indicate that the Ministry of Finance did not consult relevant stakeholders or detail the potential savings before taking an initiative to reduce such sensitive matters like vehicle maintenance costs for government officials.

Senior officials have informed Prothom Alo that the language of the Ministry of Finance’s letter to the Ministry of Public Administration about reducing vehicle maintenance expenses was inappropriate. The normal procedures for writing official letters were not followed, and the decision was rushed.

On 9 July, the Ministry of Finance sent a letter to the Ministry of Public Administration to initiate the reduction of government officials' vehicle maintenance expenses from the existing Tk 50,000 to Tk 25,000.

The letter mentioned that there was an opportunity to slightly reduce the financial benefits provided for motor vehicle maintenance expenses for officials who had received interest-free loans for vehicles, to ensure proper use of limited resources, bring inflation to a manageable level, and maintain macroeconomic stability.

There were instructions from the Prime Minister to set vehicle maintenance expenses at a rate of Tk 25,000 per month instead of Tk 50,000.

In response to the Prime Minister's "kind instructions," the Ministry of Public Administration was requested to undertake the necessary initiatives after examination of the vehicle maintenance expense reduction.

Questions have been raised by government officials regarding the language of the letter sent from the Ministry of Finance to the Ministry of Public Administration. The letter stated that there were “instructions from the Prime Minister” to set the vehicle maintenance costs from Tk 50,000 to Tk 25,000.

Government officials have said that the language in the Ministry of Finance’s letter was not appropriate. This letter was a clear violation of the Secretariat Instructions.

According to Article 150, Clause 1 of the Secretariat Instructions, any letter conveying governmental orders should not state that a decision has been personally made by the President or Prime Minister. It should mention that a decision has been made by the government.

However, the Ministry of Finance's letter directly mentioned "the kind instruction of the Prime Minister, " which contradicted the Secretariat instructions and pinned the responsibility of the decision personally on the Prime Minister.

On 9 July, it wasn't just the reduction in vehicle maintenance privileges that was communicated. Sources from the Ministry of Public Administration stated that deputy secretary and above were previously eligible for an interest-free loan of Tk 3 million to purchase a vehicle.

Another letter on that day announced the suspension of this benefit for government officials.

The issuance of these two decisions on the same day created widespread resentment within the administration.

Later, another letter requested the Ministry of Public Administration to investigate and take necessary initiatives regarding providing educational leave instead of deputation for officials going on full scholarships to study abroad or domestically. Officials were also upset with this letter.

This letter, citing the Prime Minister’s instructions, stated that government officials who receive full scholarships or fellowships for postgraduate studies at home or abroad are already provided with financial support covering tuition, accommodation, and living expenses. Therefore, instead of granting deputation or full salary and benefits, they may be offered study leave.

An official from the Ministry of Public Administration, speaking on condition of anonymity, told Prothom Alo that if this directive were implemented, they would receive half of their salary during that period, reducing their financial benefits.

Mid-level administrative officers have said that after the vehicle maintenance expenses reduction letter reached the public administration, there was widespread dissatisfaction not only within the administration but also in the military, judiciary, and election commission.

Because the monthly benefit of Tk 50,000 for vehicle maintenance is received not only by civilian government officials but also by officers in the judiciary, election commission, and armed forces.

Sources from the Ministry of Public Administration report that approximately 2,500 officers of deputy secretary rank or above currently receive Tk 50,000 monthly for vehicle maintenance. Additionally, about 3, 500 officers from the armed forces, 800 from the judiciary, and 400 from the election commission are under this benefit, totalling approximately 7, 200 officers.

Officials from the public administration question why the Ministry of Finance made such a unilateral decision on a sensitive matter without review or consultation. It would have been better to make such decisions after careful consideration and discussion with various parties.

Furthermore, there are many other ways and areas where government expenses can be reduced.

Sources from the Ministry of Public Administration say that as dissatisfaction grew within the administration, on 16 July, the Ministry of Finance issued a new letter stating that the initiative to reduce monthly vehicle maintenance costs for senior-level government officials from Tk 50,000 to Tk 25,000 was being reversed, and the expense would remain at Tk 50,000.

In the meantime, Joint Secretary Mohammad Zakir Hossain, who signed the letters related to vehicle maintenance expense reduction and educational leave, was removed from the Ministry of Finance. On 19 July, an order was issued for his transfer to the Ministry of Public Administration.

While the specific reasons for Zakir Hossain's transfer are unknown, there had been discussions and criticism surrounding his signed directives within the administration. However, some have questioned why only a mid-level official was removed, while those whose decisions led to this situation are not being addressed.

Transparency International Bangladesh (TIB) has criticised the decision of withdrawal. The organisation stated that the government has capitulated to the undue influence of a privileged class of bureaucrats.

The Executive Director of TIB, Iftekharuzzaman, said that stepping away from a decision made at the highest level of government under the current economic crisis due to dissatisfaction from a class of beneficiary officials is not normal. Rather, it is an expression of the government’s helpless surrender to bureaucracy.

To resolve the “misunderstanding, ” a fresh directive has been issued to the Ministry of Finance to review two proposals regarding vehicles.

One proposal is to evaluate how much the government’s annual expenditure would be if an official were provided with a government vehicle, driver, fuel, and maintenance benefits. The second is to allow an official to purchase a vehicle with an interest-free loan, as per the existing system. They have been asked to assess and report to the government which option is more cost-effective.

Sources from the Ministry of Finance reveal that in 2016, the Finance Division initiated the provision for select officials to purchase vehicles for personal use, financed by the government, with the primary aim of reducing the government's operational expenses in the long term.

The main rationale behind this policy was to reduce reliance on the government transport pool; decrease expenses related to drivers, fuel, maintenance, tires, overtime, and administration; simplify government vehicle fleet and asset management; and reduce recurrent government expenditure as officials were responsible for their own vehicles.

Officials say that this policy resulted in long-term reductions in government operational expenses. If the government starts purchasing vehicles again and provides funding for fuel, drivers, and maintenance, the costs will increase.