The government is considering doubling the power sector subsidy to Tk 18,000 crore in the upcoming budget of FY 22-23.
The overall subsidy and incentive allocation is estimated to rise by Tk 16,620 crore to Tk 57,045 crore in the upcoming budget, Finance Division officials said on Tuesday.
In the current budget, the subsidy in the power sector was fixed at Tk 9,000 crore. This year, the subsidy is being doubled in this sector. However, in the revised budget, the subsidy in the power sector has increased by Tk 3,000 crore to Tk 12,000 crore for FY22.
The subsidy and incentives have continued increasing in the budget every year. As a result the allocation is also being increased. Such as in the budget of FY22, Tk 40,425 crore allocated as subsidy and incentive which was increased by Tk 12,857 crore to Tk 53,282 crore in the revised budget.
The allocation in the subsidy, incentives and loan assistance is estimated to increase by 26.13 per cent or Tk 27,910 crore to Tk 1,77,145 crore in the upcoming budget due to adverse impact of Covid-19 pandemic and Ukraine-Russia war, the budget officials said.
In the budget of FY22, the allocation of these three sectors was Tk 1,49,235 crore.
According to the estimates of the Finance Division, the size of the budget of the upcoming FY23 is around Tk 6.78 trillion.
Out of this, the total expenditure in the three sectors of subsidy, incentive and cash loan has been estimated at Tk 1,77,145 crore.
In the upcoming budget, Tk 15,000 crore is estimated as incentive for the agricultural sector. The current fiscal budget allocated Tk 9,500 crore for the agriculture sector.
Considering the importance of food production the incentive is increasing by Tk 4,500 crore.
Though, in the revised budget, the total expenditure in this sector has increased by Tk 2,500 crore and stands at Tk 12,000 crore.
Finance Division sources said around Tk 17,300 crore is estimated to allocate for import of LNG, payment of interest subsidy on incentive packages.
In the budget of the current financial year, an allocation of Tk 10,300 crore was kept for this sector. In this sector the allocation for subsidy and incentive was proposed to increase by Tk 7,000 crore.
In the revised budget, the subsidy in these sectors has been increased by Tk 5,000 crore to a total of Tk 15,300 crore.
The Finance Division officials say the subsidy will be effective only if the prices of electricity, gas and fertiliser are not adjusted in the next financial year. If the prices of electricity, gas and fertilisers are increased, the amount of subsidy may also decrease.
Among others, in the upcoming budget the food sector subsidy is estimated at Tk 6,745 crore.
According to the Finance Department, the target for procurement of food grains in the current financial year was 32.56 lakh tonnes. In contrast, about 75 per cent of food grains have been collected.
On the other hand, the total food grain distribution target in the current financial year is 32.75 lakh tonnes.
