The government austerity measures have come under pressure as the ministries and divisions demand for releasing funds of 460 development projects that have been postponed due to deadly coronavirus pandemic.
DO letters (semi-official letters) of ministers and MPs are being sent to the finance ministry. Besides, request letters are also coming from different division and departments.
In order to reduce the expenses of the government amid coronavirus situation finance division has taken different austerity measures including postponement of 460 development projects.
Development, employment and poverty alleviation activities in the region are being severely hampered due to the suspension order, the letter said. In the current situation, funds have been released for some public welfare projects. Other projects will be phased out if the overall situation improves, according to finance division sources.
Asked about this, Planning Minister MA Mannan said that no development project has been left out. The disbursements on low priority projects have been temporarily discontinued to save money for odd Covid-19 economy situation. The fund release will remain suspended until the situation improves. The minister said salaries and allowance of project officials and staffs is being disbursed on priority basis.
“Now many ministries are applying for fund disbursement. We are monitoring the overall situation. After that, if the situation improves, a positive decision will be taken in this regard,” the minister added.
In order to save money for dealing with the coronavirus situation, a letter was sent from the Ministry of Finance to various ministries, divisions and agencies asking them to assess the importance of the projects. In the light of that letter, it was asked to send the list to the Ministry of Finance by identifying the more important, less important and medium important projects on its own consideration.
After receiving this list, it was decided to suspend 40 per cent disbursement of funds from the government funding for the implementation of less important 480 projects. Besides, it was decided to suspend 30 per cent disbursement on more important projects and 30 per cent disbursement on medium important projects.
As a result of the suspension of funding the project by the Ministry of Finance, about Tk 40,000 crore is expected to be saved and out of the amount Tk 26,000 crore will be saved from 460 low priority projects.
Meanwhile, a concerned official of the finance division told The Business Post on condition of anonymity that they have identified less important projects from different ministries and sent the list to the finance ministry. They will keep funding off the projects from the list given to them. 'Now they are again sending letters to those ministries to restart financing the projects he said.
However, official also said that the next decision may be taken by monitoring the revenue situation of the country by December. An official said the salaries and allowances of the projects have been disbursed but full disbursements of the project funds await decision from the top level.
Former caretaker government's finance adviser AB Mirza Azizul Islam said that spending on low priority projects would reduce the expenditure on priority sectors and priority projects. This will also reduce the implementation rate. Besides, implementation of the project will be delayed.
“Because every project is taken for 3 years but it takes 6 years to complete. Not the way it is needed. I think the low priority project needs to be absolutely suspended at this point,” he said.
According to the Ministry of Finance, the Rajshahi Division Rural Infrastructure Development Project has been marked as a low priority project by the Ministry of Finance. However, Swapan Bhattacharjee, the state minister for local government, has given a semi-official letter to the finance secretary to disburse the fund. He said that innumerable people from Rajshahi, Natore, Naogaon, Chapainawabganj, Pabna, Bogra and Joypurhat are involved with this project.
In the letter the state minister requested to upgrade the project from low priority to high priority. The cost of the project is Tk 614 crore.
Food Minister Sadhan Chandra Majumder has given a semi-official letter to release funds for another project related to rural development infrastructure in Rajshahi region. He said in the letter that development activities in the area were being hampered due to suspension of funds from the project. Many people have become unemployed. The construction work of this project has been completed. But due to the suspension of the fund disbursement bill for construction remains unpaid. As a result, he requested to upgrade the project from low priority to high priority to complete the work on time. The cost of this project has been estimated at Tk 2,060 crore. In the current financial year, ADP has allocated Tk. 200 crore for this sector.
A total of 24 projects costing around Tk 1048 crore of the Ministry of Telecommunication and Information Technology have been labelled as low priority projects. Tk 943 crore out of the total cost has been allocated. State Minister for Information and Communication Technology Junaid Ahmed Palak has given a semi-official letter to release funds for these projects. He said work of 16 of the 24 ongoing projects will be completed in the current financial year.
In response to the global epidemic coronavirus, the ministry requested for disbursement of fund of the projects to get everything to people's doorsteps through an uninterrupted network he said.
A letter signed by Director (Administration) Mohammad Mominur Rahman has been sent to the Finance Secretary from the Prime Minister's Office to release funds for four projects titled Support to Capital Building of Bangladesh Economic Zone Authority, Establishment of Jamalpur Economic Zone, Investment Promotion and Industrial Development Increase Production-1 and Entrepreneur Creation and Skills Development. The letter rationalized that the first three projects would be completed within the current fiscal year. In order to attract foreign investment, investment promotion and industrial development increase production-1 project has been taken up.
According to sources of the finance ministry, funding for 460 projects has been suspended including 24 projects related to the Rooppur Nuclear Power Plant Project implementing promise of the Prime Minister. The finance department has decided to give 60 percent discount in favour of the next projects. And in all other projects, only funds for salary, allowances and car expenses are to be disbursed.
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