The government will continue to maintain its austerity measures for an indefinite period to muzzle unnecessary public spending.
In a circular issued last Tuesday, the Finance Ministry directed other ministries and divisions to follow 16 austerity measures introduced last September in the wake of soaring oil prices globally.
The government move came after the ministries and divisions started loosening of control on expenditure of public money at the outset of the new fiscal in a state of confusion about whether or not the September austerity measures were in force.
The circular said: "The tenure of the austerity measures has been extended until the next directive. It will be effective from the date it has been issued."
The measures helped the government save Tk 3.15 billion from its development and non-development fund worth Tk 610.58 billion in the last fiscal.
The austerity measures include 10 per cent cut in fuel supply to ministries, their divisions, departments and bodies, 10 per cent reduction in entertainment and miscellaneous expenditures under both development and non-development budgets and ban on procurement of new cars for projects.
In the same directive, the ministries and divisions were also asked to be economical in using telephone, water, electricity and gas.
Critics, however, see such austerity measures offering little solace against the backdrop of growing losses incurred by different state-owned enterprises (SOEs) in absence of proper reforms.
Due to lack of proper guidelines, many SOEs incurred huge losses in the last fiscal. Among them, the Biman Bangladesh Airlines suffered financial losses worth of Tk 10.0 billion and the Bangladesh Power Development Board to the tune of Tk 9.92 billion in the year.
Besides, corruption in the absence of good governance is also causing drainage of a substantial amount of public money each year.
To check the rampant corruption, the government formed an independent anti-graft body. The new anti-graft body, however, could not detect any corruption during the last one year and a half.
Defending the government steps on the austerity measures, the finance ministry officials said the steps were taken in view of the price hike of fuel oil in the international market.
The hike in prices of petroleum products and other commodities had hit many least developed countries (LDCs) including Bangladesh during the last couple of years.
The officials, however, admitted that either some new additional steps should be taken alongside the existing measures or the percentage of fuel supply should be reduced further to make the austerity measures more effective.
The government has fixed development and non-development expenditure at Tk 697.40 billion in the current fiscal, higher by 14 per cent from the last fiscal's allocation.