The government has planned to keep aside Tk5,000 crore as block allocation in the proposed budget for the fiscal year 2014-15.
A Finance Ministry official said the block allocation may increase by 16.31% compared to the amount of fund in the outgoing fiscal year, considering the possibility of natural calamities in the country after ten years.
The northern districts are now experiencing drought due to withdrawal of water from the rivers, he said, adding that the Planning Ministry will allocate some funds for the development in the areas.
Sources in the Finance Ministry said the total budget outlay for the next fiscal year and the block allocations are likely to be fixed at a meeting to be held at the Prime Minister’s Office on Saturday with Prime Minister Sheikh Hasina in the chair.
Finance Minister AMA Muhith will place a proposal for an initial budget of Tk249,000 crore at the meeting. But the amount of block allocations for ministries and divisions and the budget outlay for the next year will be changing till May 30.
Block allocation or emergency fund of Tk1,299 crore under the revenue budget was fully consumed in less than five months of the outgoing
fiscal year for political purposes, prompting the government to make a new block allocation of Tk110 crore in the revised budget and it will be Tk2,000 crore in the next fiscal year, sources said.
A total of Tk3,000 crore was kept as block allocation in the outgoing year which had been used before the middle of the fiscal year. And, the Planning Ministry had decided to allocate Tk3,000 crore more.
As a result, the total block allocation for the next fiscal year will be Tk5,000 crore, up by 16.31% compared to the outgoing fiscal year outlay of Tk4,299 crore and 0.37% of total GDP of Tk1,339,500 crore for the next fiscal year, sources said.
They said during political unrest, the government had to meet additional expenditures on policing and used a chunk of the emergency fund.
The law states that the funds can only be used to meet emergency expenditures during natural disasters and in case of policy change by the government. According to the Public Money and Budget Management Act 2009, the funds cannot be diverted to sectors which are not specified during the allocations.
Due to the use of funds in unspecified sectors, the money ran out so rapidly that the finance minister failed to get money to lease the land of Mongla port for establishing a special economic zone.
Finance Ministry officials said the block allocation for the next fiscal year, which is 2% of the proposed annual expenditure of Tk2.49 trillion, will be utilised to absorb economic woes, if any. It will be used basically as a contingency fund, they said.
Financial analysts, however, raised a question on a large chunk of money as block allocation, saying that such fund allocated for politically motivated projects was misappropriated in the past.
In his post-budget parley, Muhith announced that measures were taken for constant monitoring to deal with the lurking dangers on the economic fronts.
Donors and economists had raised question about block allocation, but it was too small compared to the budget and total GDP, he said, adding that two risks - economic and political -- may emerge to obstacle the target of 7% GDP growth for the new fiscal year.
The amount of block allocation was Tk3,243 crore in the budget for the fiscal year 2009-10 while the government kept aside Tk6,826 billion in the proposed budget for the fiscal year 2011-12.
Analysts pointed out that block allocation was contrary to transparency and it was politically motivated in many cases.
