The government has revised the current fiscal’s national budget, trimming it by 6.65 percent or Tk53,000 crore to Tk7.44 trillion amid efforts to streamline public expenditure.
Initially, the interim government planned a budget cut of Tk1 trillion because of financial constraints. However, the cut finally remaind more or less similar to that of the last fiscasl year when budget saw a 6.22 percent cut. In 2022-23 fiscal year, the cut was 2.59 percent, according to sources in the Ministry of Finance.
The ministry has finalized revised allocations for all ministries, divisions, and government agencies has sent them to the Controller General of Accounts (CGA) with an instruction that that no expenditure beyond the revised allocations will be accepted.
Officials at the finance ministry stated that the budget reduction aligns with contractionary monetary policies aimed at curbing inflation.
Additionally, expenditures on politically motivated projects have been significantly curtailed, and the costs of several ongoing projects have been trimmed.
However, considering employment generation, essential expenditures have been maintained without increasing unnecessary allocations.
Despite the overall cost-cutting measures, interest payments on uncontrolled borrowings from the previous government have surged substantially. Moreover, operational budget reductions remain limited, as some unexpected expenses have further constrained cost-cutting efforts in this area.
The national budget consists of two primary components—development and non-development (operational) expenditure.
The lion’s share the Tk53,000 crore cut came from the development budget, which has been slashed by Tk49,000 crore from its original allocation of Tk2,81,453 crore.
The remaining Tk4,000 crore cut has been made from the operational budget, which initially stood at Tk5,06,971 crore.
Despite the bar on extra spending, any additional funds provided later by the finance ministry will be considered part of the revised budget.
To speed up project implementation, the Finance Division stated that project directors would have full authority to utilize allocated funds, which would be considered automatically released.
However, for non-approved revised projects and those under autonomous institutions, fund disbursement must comply with the finance ministry’s 2018 guidelines.
The size of the Revised Annual Development Programme (RADP) now stands at Tk2,16,000 crore, covering 1,437 projects. Each project has been allocated a specific budget, which will be disbursed in four installments.
Previously, project directors required approval from the Finance Division and relevant administrative ministries for fund releases.
To accelerate project execution, project directors were granted authority to release funds for the first two installments, while approval was still required for the third installment.
In response to project directors’ complaints, the Finance Division issued a circular in 2020 granting agencies full authority over fund disbursement, a policy that remains in effect.
However, for projects involving loans and grants, the conditions set by development partners and the government’s financial policies must still be adhered to.
