The finance ministry is likely to narrow down focuses on austerity steps in the coming national budget following pressures from other ministries and divisions, said officials.
Economists, however, said that the austerity rollback would be impractical since the necessity of checking unnecessary public expenditures was still relevant amid foreign currency shortages.聽聽
Officials involved in the budget making process said that the forthcoming austerity steps might be limited within saving 25 per cent allocations from power consumption and 20 per cent fund from fuel oils consumption under both the development budget and operating budget.
The ban on purchasing land from the operating budget may continue, but the land purchase under the development budget may be relaxed further.
Besides, the ban on purchasing vehicles under the development budget may continue in the new financial year beginning from July 1, but purchasing vehicles under the operating budget may be relaxed.
Already in the outgoing FY24, the government decided to purchase 261 vehicles at Tk 381 crore due to the pressure from the public administration ministry to replace the aged cars.
Procurement of so many cars in a single step was not practical as the foreign currency crunch still persisted, Policy Research Institute executive director Ahsan H Mansur said.
鈥榃e have to set priority regarding the necessity,鈥� he said, adding that purchase of cars could not be kept suspended for forever.
But the cars could be replaced in phases over the next three years, he said.
Officials said that the new cars to be utilised by deputy commissioners and upazila nirbahi officers were purchased in reference to a clause of the outgoing FY24 austerity steps that 10-year old cars could be replaced through the finance ministry approval.
Besides, the ban on foreign tours by public officials and attending overseas seminars and training under both the operating and development budgets has already been relaxed.
Many public representatives and officials were visiting abroad with special permission, added the officials.
Economists said that the government was forced to borrow $4.7 billion loan from the International Monetary Fund to check economic downturn exposed by the fast depleting forex reserves now standing at $18 billion from $48 billion in August 2021.聽
Despite presence of the IMF for the past one and a half years, the country鈥檚 economy has not improved as the government is struggling to clear the payment of private power producers amid the ongoing dollar crunch.
In his recent visit to Bangladesh, United States assistant secretary of state for South and Central Asian Affairs Donald Lu asked for availability of dollars for timely repatriation of profits by American companies doing business here.
Even the government policymakers are giving an impression that the coming budget would be contractionary due to resources shortage against the backdrop of less than expected revenue generation by the National Board of Revenue.聽聽
Former World Bank Dhaka office chief economist Zahid Hussain noted that differences between the government policy decisions and their implementation were growing.
The government policy was losing importance fast, he observed referring to the cancellation of an austerity step for fund suspension to less important development projects.
Centre for Policy Dialogue distinguished fellow Mustafizur Rahman said that austerity steps were still valid for the economy to check the inflation hovering at a decade high level, punishing low and fixed income groups.
Relaxing austerity steps may prove counterproductive, he said.
The IMF has been insisting for contractionary monetary policy projected 6.1 per cent inflation in FY 25.
Checking inflation will be the main challenge for finance minister Abul Hassan Mahmood Ali who is going to announce the national budget for FY25 on June 6 in the parliament.
