Ban on foreign travel, car purchases for govt employees continues

As part of cost-cutting measures aimed at managing government spending, the Ministry of Finance has extended the ban on foreign travel and the purchase of new cars for government employees in the 2024-25 fiscal year. This restriction applies to both development and operational budgets.

Additionally, participation in workshops and seminars abroad, funded by government resources, has been prohibited, according to a circular issued by the Finance Division today.

According to the circular, a maximum of 80% of the allocated funds can be utilised in the electricity, petrol, oil, lubricants, and gas sectors under both development and operational budgets in the new financial year.

The implementation of the Tk 7.97 lakh crore FY25 budget commenced on 1 July.

Foreign travels

In the circular, in order to reduce government expenditure in the ongoing global economic context, participation in all types of foreign travel, workshops and seminars will be stopped during FY25.

Ban on foreign travel, new car purchases to extend for govt employees in FY25

All kinds of foreign tours as well as participation in seminars and workshops will remain stopped under government's own funding. 

But, considering indispensible circumstances, foreign tours can be made on a limited scale subject to taking approval from the concerned authorities in the following cases.

Foreign tours can be made for studying masters' and PhD courses on government funding under the operating and development budget and in foreign funding against the scholarships and fellowships provided by various development partners, universities and countries.

Taking part in foreign training upon invitation or fully funded by foreign governments, institutions or development partners will not be hindered.

In case of making foreign tours under the Pre-shipment Inspection/Factory Acceptance Test (FAT), the number 1 section of the circular issued on 2 January by the Public Procurement Authority should be followed strictly.

But, considering indispensible necessities, such foreign tours under PSI/FAT can be made subject to taking approval from the Prime Minister's Office (PMO).

Buying vehicles

Expenditure on procurement for all sorts of vehicles, ships and aircraft will remain stopped. But, in case of replacing more than 10-year old transports, the expenditure can be made subject to approval from the Finance Division.

Last year, the government approved a proposal to procure a total of 261 vehicles (Jeeps) for deputy commissioners (DCs) of different districts and Upazila Nirbahi Officers (UNOs), despite the ban on buying cars for government employees in the last financial year as well.

The circular signed by deputy secretary Md Helal Uddin said allocations shown in the economic codes under the ADP of the current fiscal year could be made in the following manner.

Spending from block allocation

The reserve fund as GoB allocation against the Planning Commission under the title "development support for special necessity" and the full GoB fund reserved as "block allocation" against the ministries and divisions could be spent subject to prior approval from the Finance Division.

Under this fresh notification, all kinds of expenditure from block allocation will remain stopped.

Construction, land

Construction of residential, non-residential and other buildings will remain stopped except the infrastructures under the operating budget of the ministries of Education, Health and Agriculture.

Expenditure can be made with the approval of the Finance Division if at least 70% of the ongoing construction work is completed. 

Expenditure on land acquisition will remain stopped. The money allocated to this sector under the development budget can be spent with the prior permission of the Finance Department by observing all the formalities. 

Power

The circular states that a maximum of 80% of the allocated fund can be spent on power, petrol, oil and lubricants and gas and energy sectors.

Govt tightening grip but not for long

The government has been following the austerity policy ever since the Covid-19 outbreak. 

After the Ukraine-Russia war, the dollar crisis prevailed in the country. As revenue collection was dropping at a higher rate than the target, the Ministry of Finance became a little stricter in achieving austerity. 

Before the last parliamentary elections, however, the government withdrew from austerity at the expense of the Annual Development Programme.

According to Finance Division officials, about Tk15,000 crore was saved due to the austerity policy in the financial year 2022-23. 

It was not possible to know precisely how much was saved in the recently concluded fiscal year 2023-24. 

In the budget speech of the current financial year, Finance Minister Abul Hasan Mahmood Ali said austerity will continue on a limited scale. 

However, he also mentioned, the government will gradually come out of austerity.