Budget spending on slow lane
Budget spending in the first six months of the current fiscal year was 6.1 percent lower than in the same period of last fiscal year, according to a government report.
In the July-December period of fiscal 2009-10, the expenditure was Tk 34,607 crore out of the total budget of Tk 113,819 crore. The expenditure was Tk 36,868 crore in the same period a year ago.
The report that assessed the pace of budget implementation and economic progress in the first six months of the current fiscal year is expected to be presented in parliament today -- for the first time in Bangladesh.
Explaining the reasons for low budget spending, the report said the government spent less on farm subsidy, interest payment, food procurement and employment programmes.
In the July-December period, Bangladesh Petroleum Corporation did not spend money on subsidy.
On the other hand, development expenditure increased much.
The expenditure of the Annual Development Programme (ADP) increased by 42.2 percent to Tk 8,807 crore in the first six months of fiscal 2009-10 over the same period a year ago.
The size of the ADP was Tk 30,500 crore, of which the government could spend 29 percent.
The budget deficit in the July-December period was only Tk 946 crore, way down from Tk 6,129 crore in the same period a year earlier.
For the current fiscal year, the total budget deficit has been estimated at Tk 34,358 crore.
As the budget deficit was low, the government did not borrow from the banking system in the first six months. It rather repaid Tk 11,108 crore.
High revenue earnings, an increase in savings instruments sales and increased foreign assistance helped narrow the deficit, according to the report. As a result, the government had a cash balance of Tk 12,000 crore at the end of December 2009.
It was observed at a cabinet meeting yesterday that the country's economy is now in a better position than any other time in the past.
“The investment and revenue collections have increased in the first six months of fiscal 2009-10,” the prime minister's Press Secretary Abul Kalam Azad told reporters.
The government projects 6 percent GDP growth for the current fiscal year.
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