Restriction on vehicle purchases, land acquisitions and foreign tours imposed

Special Correspondent

The interim government has started process to cut the revised budget for the Fiscal Year (FY) 2024-25 with the aim to follow austerity policy.

The initiative has been taken to keep fiscal pressure within the government control, contain inflation and prevent foreign currency reserves from falling further.

Through the move, the government has brought some restrictions on all types of spending for vehicle purchases, land acquisitions and foreign tours.

Meanwhile, a circular has been issued in this regard revealing that travel can be done only in urgent and essential cases and 50 percent of the allocated money can be spent on the government travel expenses. The unspent money cannot be spent anyway in any other sector. Besides, no ministry can claim additional money for them according to the new revised budget.

The finance department has asked various ministries to keep the revised budget size limited within the total expenditure limit (operations and development) mentioned in the original budget and no additional allocation can be claimed.

At the same time, if any money is supposed to remain unspent in the development expenditure that money cannot be transferred to other operational sector.

The Finance Department of the Ministry of Finance issued a ‘Budget Circular’ on Thursday last indicating these instructions to all ministries and departments.

Not only that, all the ministries and departments have also been asked to submit their revised budget estimates according to the prescribed form to the Finance Department by November 28.

The budget circular titled ‘Preparation of Revised Budget Estimates (Management and Development) for the financial year 2024-25 states that, ‘In order to achieve the policies and objectives of the concerned ministry, the relevant ministry or department may reduce or increase the allocation of various operational units or items or economic codes within the total expenditure limit mentioned in the main budget of the current financial year. In light of the government’s current austerity policy, purchase of all types of motor vehicles has been barred. However, in the case of purchase of TOI&D vehicles, which are older than 10 years, prior approval of the Finance Department must be required.’

Regarding the calculation of the Revised Revenue and Capital Receipt Estimates, the Budget Circular states that, ‘The revenue collection of the first six months of the last two fiscal years (2022-23 and 2023-24) and the first four to five months of the current fiscal year should be taken into consideration.’

At least 13-point instructions were given in the budget circular for formulation of revised ‘Annual Development Programme’ (ADP).

Of them, it has been said that, the number of projects to be limited in the revised ADP and no unallocated project will be kept in the original revised ADP.

On the other hand, less important projects should be prioritized in the light of the government’s strategic goals and objectives.

No unallocated project shall be placed in the core of the revised ADP, it’s directed.

Besides, the non-ADP projects of the current Fiscal Year which have already been approved and the projects which allocations have already been made should be included in the revised ADP along with allocations.

Necessary funds should be kept against all the projects that will be completed in the current financial year. In the case of foreign aided projects, the project assistance can be fully spent, but in this case, the necessary funds must be kept in the government expenditure part.

According to the circular, if any money is allocated from unexpected sectors, its reflection must be ensured in the revised budget.

According to the guidelines, maximum 80 percent of the allocation for electricity, gas and energy sectors can be spent.

Expenditure of funds allocated to residential, non-residential and other buildings and structures will remain closed.

Apart from this, allocation of funds to the land acquisition sector will be stopped and foreign travel expenses will be suspended, the circular revealed.

It has also been asked to reduce the allocation from slow projects and add it to fast-paced projects. Besides, it was directed to give priority on the projects related to agriculture, agro-based industries, power generation, post-flood rehabilitation, cyclone and tidal damage.

Among others, foreign aided projects and others, which are related to post-flood rehabilitation or balancing regional development, have been suggested to be prioritized for inclusion in the revised ADP.