The interim government has given special emphasis on budget support to deal with the ongoing dollar crisis and reserve deficit. This support has already been sought from various development partners.
As part of this, the Asian Development Bank (ADB) is providing budget support of $400 million. The organization is providing this under Sub-Programme-2. Bangladesh will receive budget support through the "Climate Resilience Inclusive Development Program (CRID)."
The Finance Division has recently formed a 16-member committee to expedite the receipt of assistance. The committee formed in a meeting chaired by Additional Secretary (Macroeconomics) of the Finance Division Dr Ziaul Abedin has been given the responsibility of member secretary. In addition, Senior Assistant Secretary of the Macroeconomics Division Tasnova Rahman will serve as member secretary.
Asked about budget support, former Senior Secretary of the Economic Relations Division (ERD) Kazi Shafiqul Azam said that budget support is a special type of assistance. It is not given against any project or programme. The government can spend this money according to its needs and priorities. Here, the organisation that provides budget support does not have any conditions of its own. This is the biggest advantage of budget support.
"In other words, our expenditure is more than our income. As a result, there is a budget deficit. Budget support will play an important role in meeting this deficit. This support will also play a role in increasing reserves. That is why the government always seeks budget support from development partner countries and organisations at times of crisis," he added.
In response to a question, he said that there is no separate interest rate for budget support. Just like the interest rate, grace period, and repayment period for other ADB loans, the same is applicable for budget support.
According to Finance Division sources, ADB had promised to provide budget support of $800 million in two fiscal years. Of this, it gave $400 million to the government under Sub-Programme-1 in the last fiscal year 2023-24. The disbursement of funds was completed by December 2023.
Now, it has been agreed to provide a concession of $400 million under Sub-Programme-2 for the current fiscal year 2024-25. After long discussions on this issue, the possibility of receiving money has arisen. In this regard, this 'Programme Implementation Committee' has been formed to finalise the policy action for obtaining loans under Sub-Programme-2 and implement it quickly.
The members of the committee are - a representative of the Cabinet Division, a representative of Bangladesh Bank and a representative of the Ministry of Environment, Forest and Climate Change.
The committee also includes one representative each from the Financial Institutions Division, Ministry of Agriculture, Ministry of Water Resources, Local Government Division, Ministry of Disaster Management and Relief, Road Transport and Highways Division and Ministry of Railways.
In addition, representatives from the Power Division, Planning Commission Activities Division, Budget-2 Division of the Finance Division and the Joint Secretary of Revenue Policy of the Macroeconomic Division of the same department will be members.
Sources said that they expect a total of $600 million to be released by December next year, with another $200 million added to the previously promised $400 million.
ADB has increased the budget support amount in response to the request of the interim government. In response to a question, he said, "I am not aware of the formation of a committee of the Finance Division."
Sources said that Bangladesh may receive the budget support promised by ADB by December next year. Along with this, the organisation will also provide financial and technical assistance to the country.
In early September, three development assistance organisations including ADB held a courtesy meeting with Finance Advisor Dr Salehuddin Ahmed. The issue of budget support was discussed there.
Finance Secretary Dr Khairuzzaman and ERD Secretary Shahriar Quader Siddiqui were present at the meeting.
