Interest-free car loans drives govt costs up

Ali Imam Majumdar | Update:

Ali Imam Majumder. File PhotoIt has been reported that many government officials are misusing the interest-free loans being provided to purchase cars. The loans had been provided in the hope that it would reduce the burden upon the government to purchase and maintain new cars every year. But this scheme is not proving to be effective.

According to a recent report appearing in an English daily, in the three financial years from 2015 to 2018, the government officials were provided loans to purchase 165 and then 219 and then 234 cars respectively. However, expenditure of the government transport pool hasn’t lessened at all. In fact, it is steadily on the rise.

The budget for the government transport pool for these three years was Tk 1.23 billion, Tk 1.46 billion and Tk 1.62 billion respectively. And this didn’t include funds to purchase the new cars. Yet in 2017-16 alone the government provided Tk 3.70 billion for cars. The expenditure of the ministries and departments for car maintenance is simply increasing.

In FY 2018-19 the public administration ministry’s budget in this regard was Tk 800 million. This has increased to Tk 950 million in FY 2018-19. And the budget of the internal resources division has increased from Tk 710 million to Tk 790 million.

Senior officers had the facility of using vehicles for official purposes from beforehand. They could also use the cars for personal purposes with a nominal payment. But the condition of the cars would deteriorate rapidly as the officials would not take proper care of the vehicles. Within a very short period of time, the government would have to buy a fresh lot of cars.

In order to reduce these costs, it was decided to provide the officials with interest-free loans to buy cars. They would also be paid Tk 50,000 monthly for the driver’s salary and maintenance of the car.

This seemed fair enough. Those who purchased the cars with these loans were not eligible to use of any other government car. Only secretaries can use an SUV in addition to the car bought with the loan. In special cases the others can use other vehicles with due permission when having to travel to distant locations. But it is not understandable how some of the officers use other cars to travel within Dhaka city itself. The government does not seem to have an effective monitoring system in place to prevent such irregularities.

Previously officers of the joint secretary rank and above would have the provision to use official cars round the clock. Now even deputy secretaries have that facility.

According to the news report, in the first year some of these officers take out a first party insurance on the cars and then later third party insurance. But the regulations require full insurance coverage.

It was also reported that some of the officers used Uber and other ride sharing services.

These matters are unacceptable. It is good for the government officers to receive all sorts of facilities, and this can be an incentive for meritorious persons to join public service. However, the rules must not be violated. It is not acceptable that anyone who receives the car loan, also avails the ministry’s microbus to commute between home and office or uses vehicles of a department under the concerned ministry.

Such misuse of facilities is not just unethical, but a violation of financial discipline too.

According to the news report, there are presently 59 secretaries, 510 additional secretaries, 727 joint secretaries and 1834 deputy secretaries. But there is no mention of how many posts there are actually to accommodate these officers. Year after year promotions are being given even in the absence of vacant posts. These surplus officers do not have any specific duty or even any proper place to sit. Yet they are liberally provided with vehicles. This creates pressure on the transport pool expenses.

It can only be hoped that the senior government officials set an example by using their vehicles prudently. Many certainly are doing so. But the few who misuse the provision create questions concerning the entire matter.

It is fine for the officials to use whatever is their due. They can ask for further facilities too, if justified. But they must also have the responsibility and sense of liability that goes with such facilities.

The provision of cash for cars was given to gradually take pressure off the government and to bring order to the government transport system. This provision must not fail simply due to the unwarranted behaviour of certain officials.

* Ali Imam Majumder is a former cabinet secretary and can be contacted at This piece appeared in the print edition of Prothom Alo and has been rewritten in English by Ayesha Kabir

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