The government on Sunday initiated some key cost-cutting measures for government offices to maintain austerity to tackle the economic crisis induced by the Russia-Ukraine war in the development budget for the 2023-24 fiscal year.
The government has reduced expenditures for government officials at the start of the fiscal year 2023-2024. In addition to vehicle curbing, numerous other cost-cutting measures have been implemented by government agencies, indicating a concerted effort to effectively navigate the financial constraints.
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An official circular issued on Sunday represented government orders limiting and suspending certain operating and development expenditures, reportedly as a result of Bangladesh’s financial difficulties resulting from the global economic crisis. For the current fiscal year, the squeeze applies to all government ministries, departments, semi-government, autonomous bodies, corporations, state-owned enterprises, and financial institutions.
Tightening budget for various sectors
Operational expenditures of allocated funds for the water vessel and aircraft sectors will remain suspended, while expenditures for the replacement of vehicles older than ten years will be permitted with prior sanction from the Finance Division.
land acquisition budgets will not be spent, and the electricity and energy sectors must save 20% and 25% of their respective budgets, respectively. In the electricity sector, up to seventy-five percent of the budgeted amount may be spent. In other words, 25% of the funds must be set aside for savings.
The government has also set the highest expenditure limit for the current fiscal year at 80% of the allocated operating and development funds for the petrol, oil and lubricant, petrol and energy sector, with the remaining 20% to be saved.
No more international travel at government expense
In addition, the circular states that all forms of international travel, workshops, and seminars will be suspended during the fiscal year 2023-2024. Considering the essential requirements, however, limited international travel may be permitted with the appropriate approval from the competent authority. According to the directive, government officials will participate in master’s or doctoral programs funded by the budget and scholarships.
The official estimates, the country’s foreign-currency reserves are hovering around $30 billion, which explains why foreign travel restrictions have been imposed. In the current fiscal year, all residential, non-residential, and other buildings will have their expenses suspended entirely, according to the circular. Several times, the Prime Minister expressed her disappointment with the construction of empty structures. As a result, no funds will be allocated for building construction as part of measures to reduce expenses.
In conclusion, the suspension of vehicle purchases and the implementation of stringent expenditure constraints demonstrate the government’s commitment to prudent financial management in the current economic climate.
