Asif Showkat
The government has taken an initiative to streamline the loss-making state-owned enterprises to reduce the subsidies doled out to them through its fiscal policy, official sources said.
‘The finance ministry will want to reduce subsidy that is given to the loss-making SOEs as the money will be diverted to the country’s productive sectors,’ a senior official of the finance ministry said.
The official also said if strong monitoring could reduce the loss of the SOEs then the government would be required to give fewer subsidies to them, and as a result the country’s fiscal budget deficits would shrink.
‘Extra units of loss-making SOEs will be merged into a single unit,’ the official added.
The budget deficit in July-September period of 2008-09 stands at 2.2 per cent of the GDP against an estimated 4.9 per cent.
The government in fiscal year 2005-06 provided Tk 567.63 crore in subsidies to 13 public entities, which increased to Tk 633.76 crore in FY07.
Cash subsidy is given to the Bangladesh Jute Mills Corporation against export of jute goods. This corporation received Tk 100 crore in subsidies in FY06 and FY07.
The Bangladesh Water Development Board received Tk 279 crore in subsidies in FY06 and Tk 329.08 crore in FY07.
Finance ministry sources said the ministry had issued a circular last week and asked 48 autonomous bodies or corporations to send in their monetary information for the last six months with 13 expenditure heads by January 25.
The 13 expenditure heads include the details of capital expenditure, operating expenses, income-expenditure report, contributions made to the public exchequer, fund-flow report, cash-flow report, debit service liabilities, and long- and short-term loans.
Besides, the establishment ministry will send information with their views on 48 autonomous bodies or corporations to the monitoring cell of finance ministry by February 12. The cell will then estimate the subsidies required for the SOEs in FY10 as well as revise that in the current budget.
Multilateral donor agencies such as International Monetary Fund have always set conditions like reducing losses incurred by the SOEs for providing financial assistance to the government.
The IMF last year asked the interim government to introduce a quarterly flash reporting system for five SOEs that account for the bulk of the loss. They are Bangladesh Petroleum Corporation, BJMC, Power Development Board, Bangladesh Chemical Industries Corporation, and Biman Bangladesh Airlines.
Meanwhile, the net loss of the SOEs increased by 132 per cent in FY08 mainly due to increased price subsidy for petroleum products.
According to the economic review of the finance ministry, 44 SOEs incurred a net loss of Tk 5,276 crore in FY08, up from Tk 2,275 crore in the previous fiscal.
According to the finance ministry data, the total debt service liabilities outstanding against 40 SOEs up to June 2007 stood at Tk 65,238.68 crore, of which Tk 6,199.68 crore, or only 9.50 per cent, has been recovered so far.
Courtesy: newagebd.com
