It may also increase various fees, including charges for land registration, to meet the shortfall of non-tax revenue collection target.
Finance Minister AMA Muhith yesterday said subsidy and balance of payment (BoP) now are the biggest challenges. So the government is mulling over phasing out subsidy on power. However, the measures to be adopted cannot be spelled out at the moment.
A meeting of the Fiscal Coordination Committee with the finance minister in the chair yesterday discussed the measures, which will be finalised in consultation with the prime minister, said finance ministry officials.
The government has been considering the measures as the economy came under pressure of different variables like inflation, exchange rate and excessive borrowing from banks.
The finance division at yesterday's meeting placed the statistics of subsidy of the current budget where the total allocation on subsidy is Tk 20,477 crore against various ministries' demands of Tk 46,000 crore.
The finance ministry has pointed out that of the asked amount, subsidy to the tune of Tk 35,000 crore may be given which is still around Tk 15,000 crore more than the budgetary allocation.
A finance ministry official said the reduction of subsidy may result in power and fuel price hike soon again.
In a meeting with the prime minister in September, the finance division proposed increasing fertiliser prices by at least Tk 5 per kg. However, no decision was taken about this.
Yesterday's meeting also decided that the planning ministry will very soon identify the less important projects and stop financing those. It also asked the finance division to furnish a directive on limiting expenditures on meetings, seminars and entertainment in both development and non-development sectors.
Moreover, in recent times, various ministries have been making large-scale recruitment of class-III and -IV employees which created pressure on revenue expenditure.
A finance ministry source said the meeting discussed the economic situation of the USA and different countries in Europe and the Middle East. It observed that the economy of Bangladesh may take a plunge due to the crisis there.
The finance division said the government's income and expenditure trend shows that the budget deficit may cross 6 per cent of the GDP against the target of 5 per cent. Yesterday's meeting decided to keep the deficit limited to 5 per cent of the GDP. Otherwise, not only the budget will come under pressure but the IMF mission may also raise questions.
The meeting was of the view that the NBR tax may achieve the target but the non-NBR revenue may fall. To avoid the fall, different fees and charges may need to be upped, the finance division proposed.
Besides, the meeting also directed the Economic Relations Division (ERD) to take necessary steps to expedite foreign aided projects.
The coordination council will meet again in December or January and then review the implementation of the issues discussed in this meeting.
Meanwhile, referring to a roundtable earlier organised by The Daily Star, Muhith said they [the roundtable participants] pointed out 30 risks, of which, 26 are from my budget speech while they came up with four. Besides, it appeared to him that economists and the media are trying to pull down the country's economy.
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