June 15, 2021


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Letters to all ministries to reduce costs

The government wants to be more economical in coronation. As part of this, the finance ministry has advised ministries and departments to be frugal in state procurement. This was suggested in a circular on Monday.

At the same time, instructions have been given to follow the Public Procurement Act (PPA) and Public Procurement Rules (PPR) in government procurement and to ensure transparency in procurement.

According to a Finance Ministry circular, the government is giving utmost importance to the health sector, social security and economic management in tackling the ongoing tax crisis in the country. In this context, all ministries and departments are requested to be more frugal in their procurement. It was also requested to follow PPA and PPR properly in the case of government procurement and maintain transparency in the procurement process.

According to the concerned, the revenue is not being collected as expected due to Corona. Again, the economy has to spend to cope with the effects of the corona. Assistance is being provided to the affected industries and businesses in Corona under various incentive packages. On the other hand, ordinary people in trouble have to be given cash and food aid. In this situation, as much as the government’s expenditure has increased, the income has not increased accordingly. For this, efforts are being made to reduce the cost in various ways. Earlier, the government has decided not to do any new construction work under the management and development budget. Therefore, on April 26, the Ministry of Finance issued a circular to various ministries and departments not to issue any new construction work related to construction and installation. Earlier, the finance ministry had said that up to 75 per cent of the ministry’s allocation could be spent on reducing the annual development program (ADP).

At the beginning of the current financial year, the government took a cost-effective policy as it did not cope with the impact of corona and the expected revenue was not generated. Discounts are kept off for the implementation of less important projects in the annual development schedule. Initially, the finance ministry directed that up to 60 per cent of the annual development program (ADP) allocation be spent. Which was later increased to a maximum of 75 percent. Besides, the purchase of cars has also been stopped under the development and management budget. Training of government officials and foreign trips are also closed. ADP implementation was slow at the beginning of the fiscal year. Implementation gained some momentum at the beginning of the second half. But as the prevalence of corona has increased, the pace has slowed down recently.

In the budget for the current financial year, the government has allocated Tk 2.5 lakh crore for development work (ADP). Which was amended to one lakh 96 thousand rupees. But even with this amount of development work, providing the necessary funding has become challenging. In the first 10 months of the current financial year, the NBR has collected a total revenue of Tk 1,95,062 crore. Although the revenue collection has increased by 11.6 percent as compared to the same period of the last financial year, the revenue collection is not being done as per the target. During this period, the revenue collection has been less than the revised target of Tk 40,535 crore.

Analysts say the NBR’s target has been raised first. Secondly, it is not possible to achieve the revised target for the current financial year in the current situation due to Corona.