The subsidy allocation for the next fiscal year is likely to increase by over 8% to Tk26,609 crore from revised outlay of Tk24,609 crore for the outgoing fiscal year, according to a latest budget document the government is now preparing. In FY14-15, the actual subsidy allocation was Tk27,400 crore.
The allocation is being increased, despite expected reduction in oil subsidy, due to a government plan to purchase more electricity from rental power plants, says the document obtained by the Dhaka Tribune.
“We’re greatly relieved as the fuel oil price substantially decreased in the international market in last one and half years,” a senior official of the finance ministry said.
An allocation of only Tk800 crore would be given for oil subsidy in the next fiscal year considering the reduced oil price as compared to a revised outlay of Tk600 crore for the outgoing fiscal year when the actual allocation was Tk2,400 crore.
According to the latest budget document, Tk8,000 would be allocated for power subsidy next fiscal year as more than 80% would go to rental and quick rental power plant. In the original budget for the outgoing fiscal year was Tk7,000 crore.
Bangladesh Power Development Board purchases electricity from the rental and quick rental plants at a price ranging between Tk13 and Tk23 per unit and sell the electricity to consumers at an average of Tk6.5 per unit, according to PDB.
In the revised budget of the outgoing fiscal year, power subsidy would increase to Tk9,000 crore.
Meanwhile, the agriculture subsidy in the next fiscal year would stand at Tk9,000 crore – a level that continues for last few years – while the food subsidy would be Tk1,900 crore, rising from Tk1,620 crore of the revised budget of the outgoing fiscal year.
Besides, a Tk3,500 crore is set aside for export subsidy in the upcoming budget. The amount was similar in the original budget for the current fiscal year, but was later increased by another Tk500 crore in the revised budget.
Jute purchase subsidy for Bangladesh Jute Mills Corporation (BJMC) would be Tk1,000 crore and other subsidy will be Tk2,409 crore for the next fiscal year.