To cut costs, govt suspends buying vehicles for 2020 | The Daily Star
12:00 AM, July 10, 2020 / LAST MODIFIED: 01:30 AM, July 10, 2020

To cut costs, govt suspends buying vehicles for 2020

The government has decided not to purchase new vehicles under all operating and development expenses for the rest of 2020 as part of its austerity measures in face of falling revenues owing to the coronavirus pandemic.

Procurement of new or replacement vehicles under all expenditures of government, semi-government, autonomous and other agencies would be on hold until December 31, according to a finance ministry circular.

The devastating coronavirus pandemic has compelled the government to embrace austerity as the shutdown has brought the economy to a screeching halt, drying up revenues.

As the government had to allocate additional funds for certain sectors to combat the pestilence, it had suspended financing for all low priority projects in the revised annual development programme for the immediate past fiscal year.

The cost-cutting would continue in the new fiscal year as there is no sign of the contagion petering out.

The coronavirus has so far infected 175,494 in Bangladesh, killing 2,238 as of yesterday.

The government may order to give utmost importance to high and medium priority projects in FY21, while any fund allocation for the low-priority projects would be suspended until the pandemic disappears, said an official of the finance ministry.

The government had also planned to ban foreign tours of government officials as part of the austerity measures, but such order would not necessitate because of the pandemic, the official said.

Already, the ADP for the new fiscal year saw lower-than-usual allocation growth as the government has embarked on bankrolling massive stimulus packages amounting to Tk 103,117 crore announced to jumpstart the economy.

Revenue collection fell massively for the second consecutive month in May as incomes and demand for goods and services crashed because of the lengthy shutdown put in place to battle the Covid-19 pandemic.

In May, the National Board of Revenue generated Tk 13,530 crore, which was 33 per cent down from a year ago. The collection had crashed 50 per cent year-on-year to Tk 9,975 crore in April.  

Economists said the government would not be able to achieve the target of revenue mobilisation for the fiscal year of 2020-21.

In another circular, the finance ministry said the doctors, nurses and healthcare workers who are directly treating coronavirus patients would be entitled to a special honourarium equal to the basic pay of two months.

The government has already allocated funds to the health division for the purpose. The honourarium would be in addition to other financial supports already announced, the notice said. 

In April the government said it decided to compensate all government employees who would contract Covid-19 while discharging duties amid the coronavirus outbreak.

The beneficiaries would include doctors, nurses and health officials as well as officials of law enforcement agencies and armed forces.

A government employee on grade 1-9 will get Tk 10 lakh if the person contracts the disease. The amount will be Tk 50 lakh if he/she dies, according to a circular.

For grade 10-14, the amount will be Tk 7.5 lakh and Tk 37.50 lakh respectively, while for grade 15-20, it will be Tk 5 lakh and Tk 25 lakh, the circular added. 

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