The government has strictly met conditions of development partners and global lenders in preparing the national budget and Annual Development Programme (ADP) for the next fiscal year, officials said.
The Planning Commission has executed conditions of the World Bank in implementing the development projects and in appointing qualified directors to the projects funded by the global lender, Planning Commission Member Professor Shamsul Alam told the Dhaka Tribune yesterday.
He said the fiscal deficit would stand at 4.3% of GDP, which is one of the conditions set by the International Monetary Fund for disbursement of its extended credit facility.
IMF will be pleased as the government reduced subsidies in agriculture, fertiliser, fuel oil and food sectors, he said. Specially, subsidies have been cut in the fuel oil sector, he added.
Alam said donor agencies’ suggestions would help increase implementation rate of the ADP. So, donors’ recommendations sometimes help accelerate economic growth. “We take good suggestions from the donors.”
Finance division sources said the government reduced subsidies by 24% for the next fiscal year compared to the outgoing fiscal year’s revised estimate because of various reforms and price adjustments.
The total subsidy allocation will be about Tk287bn in the next fiscal year while the amount of subsidy may rise by 7% to Tk374bn in the current fiscal year’s revised budget from the original allocation of Tk350bn.
The upcoming budget deficit will be Tk563bn, which is below 4.3% of GDP as compared to the current fiscal year, according to the budget proposal.
The expenditure on subsidy for petroleum and power grew substantially as the government in the last few years approved a huge number of rental power plants to offer a quick solution to power shortages.
As result, the International monetary fund has been putting pressure on the government for the last one and half year to cut down the subsidies on electricity.