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Dhaka Tribune

Government keen to cut subsidy on sugarcane

Update : 09 Mar 2017, 09:03 AM
The government has tightened its hold on subsidy to cash-strapped state-run BSFIC to purchase sugarcane during harvesting time in the current fiscal year, said an official. According to the source, the Finance Division has decided to disburse only Tk25 crore in the current fiscal year 2016-17 to meet the seasonal capital shortage created by the price trade gap in sugarcane purchase and subsidy. Finance Minister AMA Muhith will sign the summary this week as Bangladesh Sugar and Food Industries Corporation (BSFIC) will badly need the amount to meet daily expenditure and repay bank loans, official sources said. According to the summary, BSFIC wants to subsidise Tk300 crore from the Finance Division to meet the demand for seasonal capital. In the summary, it was also revealed that the disbursement of Tk25 crore will not be shown as a future example in disbursement of funds during sugarcane harvest. The government disbursed Tk50 crore to BSFIC to meet the trade gap of sugarcane purchase and subsidy to purchase sugarcane in 2015-16 fiscal year, Tk135 crore in 2014-15 fiscal year, Tk175 crore in 2013-14 fiscal year. The corporation has already demanded Tk1898.12 crore to meet the gap. But the Auditor General Office submitted a report on the total trade gap in sugarcane purchase and subsidy provided Tk1700.48 crore. The corporation has prepared a strategic work plan to run its operation which has been submitted to the Ministry of Industry and finance minister has also provided directives in this regard. According to Bangladesh Economic Review 2016, the corporation reduced its loss to Tk462.39 crore in 2015-16 fiscal year from Tk539.7 crore a year ago. Currently, the country can meet only 5% of its annual demand for sugar through domestic production while it has to spend more than Tk5,000 crore a year to import sugar to meet the annual domestic requirement of over 20 lakh tonne sugar.
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