THE government鈥檚 plan to walk back austerity measures, even if partly, in the national budget for the 2025 financial year only because the measures that have been in place have failed to produce result appears impractical. Such a proposition of reversal would prove that the government made mistakes when it put the measures in place. Besides, the circumstances that forced the government to put the austerity measures in place 鈥� checking against unnecessary public expenditure, a fast-depleting foreign exchange reserve and the shortage of foreign currency, especially the dollar 鈥� have not noticeably improved. Economists, therefore, hold brief for the continuation of the measures. The government should, rather, figure out why the measures have not produced the intended results and fix the issues that allowed the measures, which came to be somewhat relaxed in some cases towards the end of the outgoing financial year, to go awry. The government appears not to have given the measures a chance to become fruitful as it relaxed many provisions, especially foreign tours in the name of attending seminars or receiving training on special permission even when such issues were not absolutely necessary or spending on other dispensable issues.
Officials involved in budget-making say that austerity measures would be limited to saving 25 per cent of power consumption allocations and 20 of fuel oil consumption fund under the development and the operating budget in the next financial year. The ban on land purchase under the operating budget may continue but the ban may be relaxed for land purchase under the development budget. The ban on vehicle purchase under the development budget may continue but the ban may be relaxed for purchase under the operating budget. The government has already in the outgoing financial year decided to buy 261 vehicles for Tk 3.81 billion for deputy commissioners and upazila nirbahi officers amidst pressure of the public administration ministry. Buying vehicles when they are absolutely necessary cannot be suspended for years, but the purchase could be phased over several years. The government cannot bask in the luxury of spending money on unnecessary and less important issues when an economic downturn caused by the fast-depleting foreign exchange reserve, now standing at $18 billion from $48 billion in August 2021, forced the government to take out $4.7 billion in loans from the International Monetary Fund. The measures already in place prove ineffective, as experts believe, mainly because a growing differences between the policy decisions and their implementation. They further believe that the austerity measures still hold good to check against the inflation that has hovered at a decade鈥檚 high, pushing teeming millions, especially the poor and low- and fixed-income groups to suffer.
Economists believe that walking back austerity measures would very well prove counterproductive. A monetary policy of contraction and an increase in interest rates along are highly unlikely to bring about any changes unless the government stick to the austerity measures stringently, carry out the required reforms and attend to the issue of revenue generation by the National Board of Revenue. The government must, rather, fix the issues that have held back the measures from becoming fruitful.
