Dhaka, June 18 (bdnews24.com) – Many think an increase in subsidies in the proposed budget will give the poor an enhanced incentive to ease their sufferings. Not so, said budget analysts.
Finance adviser AB Mirza Azizul Islam has proposed an allocation of Tk 4,199 crore (5.27 percent of the total Tk 79,614 crore budget amount minus BPC's liabilities) in subsidies for the coming fiscal year 2007-08.
But fears of public-money abuse loom large. Experts think the fund will be abused if an effective measure to reach the target group fails. They have also said timeframes should be imposed on any new subsidy schemes.
Subsidies in the revised budget for the outgoing fiscal are Tk 3,671 crore which was Tk 2,226 crore in the original budget for the outgoing year, analysis said.
Of the proposed allocation, Tk 785 crore would be provided for food, Tk 1,500 crore for fertiliser and the power sector, Tk 750 crore for diesel, Tk 1,100 crore for exports and Tk 64 crore for others, budget documents of the finance ministry show.
Experts fear that the subsidies may be misused like the previous ones if an effective monitoring system is not introduced in proper time.
Akbar Ali Khan, former adviser to the caretaker government, told bdnews24.com: "Subsidies will bring no benefit if targeted people are not reached".
Prof Mozaffar Ahmed said what matters is who are getting the subsidies and through what means. "This could be a subject for researchers. If the marginal people do not get it, there is no meaning of subsidies," Ahmed said.
A lion's share of the Tk 785 crore in food subsidies would be spent on uniformed personnel. "These people get more benefits from subsidies than from salaries," he said.
The finance adviser said payment against the diesel subsidy would only be made to cardholder farmers only for a specific period. But there is uncertainty of who the cardholders will be.
Khan, former finance and cabinet secretary, said the government should discuss the issue with the stakeholders for fixing tenures of any new subsidy schemes.
About monitoring, Prof Ahmed said government monitoring would not work. "Officials will make a report in line with what their bosses want," he said.
He said a civil-society monitoring system could be effective.
The government has already hinted at some initiatives to rationalise budgetary subsidies to be extended toward the targeted group.
A senior finance ministry official, asking not to be named, told bdnews24.com, "The finance adviser will sit with the ministries that administer subsidies soon after the budget pressure is over."
bdnews24.com/sr/az/ad/1703 hours
