The government has decided not to release any fund until the end of December as expenditures have already exceeded the limit set for the first half of current fiscal year.
During the month, money will be disbursed only to meet urgent necessities, said official sources.
An International Monetary Fund team is due in Dhaka in late this month for a review decide on the release of fifth instalment of extended credit facility loans.
As per IMF condition, there cannot be any financial mismanagement in the government such as over expenditures that cross periodical limits.
The government wants to show the IMF mission a good picture of its coffer condition. Political considerations were allegedly there in the fund releases, leading to over disbursement.
The finance division is not currently dealing with any fund release proposals from different ministries and divisions.
It has also temporarily stopped disbursement of equity and entrepreneurship fund and giving money to overcome of capital shortage of four state-owned commercial banks.
Foreign tours of high government officials have been halted for the time being. Former adviser to a caretaker government Dr AB Mirza Azizul Islam blamed the finance division for the situation.
“It (finance division) has not performed its duties properly. As a result, the government has to halt fund release at the end of its tenure to remain in conformity with IMF conditions,” he told the Dhaka Tribune.
“The government says that more than half of total fiscal budget (Tk2.22tr) has been released already. But it does not usually happen as hartals and blockades slow down projects implementation.”
Official sources said a huge fall in revenue earning also had a negative impact on the budget fund.
An official said finance ministry disbursed half of contingency fund of Tk1200 crore in first five months of the fiscal while the remaining fund is booked already for the ministries, he added.
Officials said the next elected government might face problems to meet any extra or unpredicted expenditures. They apprehended that budget discipline could be further compromised in the coming months.
“Such indiscipline in financial management is not new during the tenure of the present government. It also happened before this time,” said Dr AB Mirza Azizul Islam.
In 2011-12, the national budget came under severe pressures due to heavy bank borrowings to pay subsidies on fuel oil, fertilisers and food.
In the same year, the government borrowed in less than eight months Tk18,957 crore, the target set for the fiscal, to meet deficits, pushing the first quarter’s inflation to 11.41%.
The government’s budget management is now heading towards same direction of two years ago as it has already borrowed Tk9,634.11 crore from commercial banks in first three months of the current fiscal, officials fear.
