Allocation for transport, energy drops slightly

The government has slightly reduced the allocations for transport and power and energy compared to the outgoing fiscal year.

The sectors had received high priorities in budgets since the Awami League-led alliance assumed power in 2009.

They were allocated Tk 1,22,448 crore in the original budget for FY24. The finance minister yesterday proposed Tk 1,13,235 crore for the sectors, which is 7.5 percent less than this year's allocation.

The dip, however, started a bit earlier. The total allocation for the sectors in the revised budget for FY24 decreased to Tk 1,03,558 crore.

Allocation for the transport sector had not decreased in the previous five years. According to finance ministry data, in FY09, the government spent Tk 4,205 crore on transport and communication. In FY22, it spent Tk 60,200 crore.

However, several mega projects in the transport sector, including Padma Bridge, Bangabandhu Tunnel, Padma Bridge Rail Link, and the elevated expressway in Chattogram were either complete or close to completion. And this could have contributed to the government reducing allocation.

Reducing allocation may reflect the government's intent to cut costs and curb inflation as well.

Prime Minister Sheikh Hasina last month directed the finance ministry to formulate a contractionary budget for the upcoming fiscal year to control inflation.

Amidst shrinking foreign currency reserves and an economic downtrend, the policymakers are preferring a go-slow policy with mega spending on transport and power and energy.

Economists have also been urging public spending cuts, especially on mega projects, and spending more on widening the social safety net programmes to help people cope in these tough times.

Praising the government for reducing allocation for energy and transport sectors, Muinul Islam, former president of Bangladesh Economic Association, said the proposal for reducing allocation in these sectors was a step in the right direction.

Muinul, a former economics professor at the University of Chittagong, however, said containing inflation to 6.5 percent would be difficult.

He said if inflation is considered, the increase in allocation for health, education, and social safety net was "not that much".

In the original budget for FY24, the allocation for education, health, and social security was Tk 1,82,537 crore.

For FY25, the government recommended Tk 1,95,773, which is a 7.25 percent rise from last year's original budget.

Budget implementation remains a big concern, especially in the health sector.

In the original budget for FY24, health received Tk 38,052 crore, but it was revised to Tk 29,782 crore due to failures to spend the money.