The New Nation - Internet Edition

The government is reportedly planning to earmark a special fund allocation in the next budget to lessen the burden and address the lingering problems of contingent liabilities of the state. The liabilities for paying fuel import bills pumping liquidity into natioanlised banks and privatising state-owned corporations have risen to a record high of Tk 17,000 crore in April 2008. It is about 3.2 per cent of GDP may increase further if fertiliser import is calculated. Welfare activities and development agenda of the government have largely been affected because of the huge liabilities and the capacities of government institutions weakened because of the spoon-feeding.

The liability was Tk 15,300 crore in October 2006 - the second highest after independence. The government took liabilities of Tk 14,558.75 crore for the Bangladesh Petroleum Corporation by giving guarantee and counter-guarantee to the Islamic Development Bank, the Bangladesh Bank and Sonali, Janata and Agrani banks. In it was difficult to pursue budgetary measures because of fund constraint. A separate budgetary allocation under the liabilities head might help the government to a great extent in this regard. The liabilities for jute and textile mills soared this year compared to previous years as 32 jute and textile mills owed four state-owned commercial banks about Tk 1,670 crore as of March.

Meanwhile, the government issued 15-year treasury bonds worth Tk 664.18 crore for Sonali, Janata and Agrani banks to address the liquidity crisis of these banks after their corporatisation, and transformed them into public limited companies. The banks have demanded special budgetary allocation in the next financial year to clear their huge arrears lying with the public sector. The government assumed the liabilities of the state-owned enterprises that were privatised from 1994 until recently. Getting rid of the liabilities is a must to face new global challenges that are now surfacing.