The New Nation - Internet Edition

UNB, Dhaka

Finance Adviser Dr Mirza Azizul Islam has brushed aside the country's ability right now to prepare a national budget without foreign aid, saying 40-50 percent of the development budget still depend on external financing.

"It's not possible, if we can't increase revenue earnings and if we' ve to widen and deepen the social safety net programmes," he told a pre-budget meeting with Economic Reporters Forum (ERF) at the Finance Ministry on Thursday. "We're yet to reach that economic situation… but we can have an objective to come out of the external assistance in the long run," said the Finance Adviser. He also rejected a notion that there would have no conditions against foreign aid, but one could have a look at the conditions whether they were harmful on a broader macro level.

In many cases, he added, a condition should not be considered as harmful when it will be attached on an agreed situation by both the lending agencies and the country.

"Harmful conditions do not come if we can convince the lending agencies," Dr Aziz said, speaking of his experience that Bangladesh could convince the IMF about the contractionery monetary policy as well as adjustment of fuel oil, gas and electricity. "This will be a year of record highest disbursement of subsidy against utility prices (fuel oil, electricity and gas)," he said. About rationing of essential items, he said non-price distribution is bound to create price corruption and massive misuse while there is a lack of delivery mechanism for rationing at this moment.

The Finance Adviser said the government has announced the new employment guarantee scheme, but is yet to design the scope of the programme.

Replying to a question, he said the amount of diesel subsidy, which could not be disbursed this fiscal year, would be carried over to next fiscal year.

He explained that the authorities took time to identify the beneficiaries of the subsidy while card system could not be introduced yet, making disbursement difficult.

Reportedly, the government has so far distributed Tk 250 crore from the Tk 750 crore allocated.

Supplementing the Adviser, Finance secretary Dr Mohammed Tareq said the subsidy only for the agriculture sector would be more than double this fiscal year. It will stand at around Tk 4,000 crore against an allocation of Tk 2,250 crore, he added.