Reforms to help cut subsidy by 24pc

The government's spending on subsidy may go down by 24 percent next fiscal year, compared to the current year's revised estimate, due to various reforms and price adjustment.
However, the subsidy spending will rise slightly in the current fiscal year's revised budget to clear the arrears of the previous years, finance ministry officials said.
The total allocation for subsidy will be Tk 28,695 crore next year, according to a draft estimate by the finance ministry.
The amount of subsidy may rise by 7 percent to Tk 37,389 crore in the current fiscal year's revised budget, from the original allocation at Tk 35,045 crore.
The expenditure on subsidy for petroleum and power grew substantially as the government in the last few years approved a number of rental power plants to offer a quick solution to power shortages.
In the backdrop, the International Monetary Fund has been putting pressure on the government for the last one year to bring down subsidy.
The government in the last 18 months adjusted electricity and petroleum prices several times due to the IMF pressure, a finance ministry official said.
For the upcoming fiscal year, the government has various reform plans that the official said may bring down the amount of subsidy in these sectors.
The government has also made a commitment to the IMF that if the difference between the international and domestic prices of petroleum goes beyond Tk 10 a litre, they will go for price adjustment to cut subsidy, the official said.r
A special audit will be carried out into the state enterprises that deal with fuel, electricity and fertiliser to contain misuse and increase efficiency so that subsidy comes down, he added.
Also, the loans taken by these enterprises for giving subsidy will be repaid from the budgetary allocation in the next fiscal year by releasing special bonds.
The amount of subsidy for Bangladesh Petroleum Corporation was Tk 13,300 crore in the current fiscal year, which may increase to Tk 15,230 crore in the revised budget. In the next budget, the subsidy on petroleum will be Tk 7,950 crore.
The subsidy on fertiliser was Tk 6,000 crore in the current fiscal year but the amount may double to Tk 12,000 crore to repay arrears.
The amount of new subsidy for the agriculture sector will be Tk 6,000 crore in the next fiscal year, but the amount may finally reach Tk 9,000 crore to pay arrears.
The subsidy on electricity will be Tk 5,170 crore in the revised budget due to price adjustment, while the original allocation was Tk 5,600 crore.
However, the electricity subsidy will be Tk 5,500 crore in the next fiscal year. Export subsidy may rise to Tk 2,750 crore next year, from Tk 2,400 crore in the current fiscal year.