The Finance Minister submitted a set of proposals to the Prime Minister on September 6, a day after the cabinet decided on two-day weekend as part of the national austerity in energy consumption. The proposals include 10 percent cut in the budgetary allocation for petrol and lubricant and also other expenditures. According to the Ministry of Establishment, a minister is entitled to only two cars with 20 litres of petrol per day from the government transport pool while 10 litres of petrol a day for a car from directorates under his ministry. A minister gets around Tk 20,000 along with his salary on account of fuel and also gets 10 litres of petrol in kind per day from the directorate under his ministry.

Not only the ministers, the state ministers, the deputy ministers and the government officer from the joint secretary level to upward have their monthly quota of fuel and are allocated funds accordingly. At present there are 25 ministers, two others enjoying ministerial status, 23 state ministers and four deputy ministers who are enjoying these fuel facilities. In addition, seven litres of petrol is being given to each of the officers ranging from the rank of secretary to joint secretary of 49 ministries and directorates.

The 16-point austerity programme of the ministry of finance includes cutbacks on fuel consumption by the ministers and government officers as well as foreign trips by senior government officers. It also proposed that shops, markets and roadside billboards consuming huge electricity should by switched off at 8.00 pm and lights on one side of the streets should also be switched off at night as a part of the austerity measures. The traders have rejected the proposal outright to close down their shops at 8.

00 pm and no step has so far been taken to switch off the billboards and one side street lights at night. It is learnt that the finance ministry's order stipulating austerity measures requires the approval of the Prime Minister to come into force and the Cabinet Division would soon submit it to the Prime Minister for approval. Converting all petroleum-based power plants into gas-fired plants within the next five years to meet the economic crisis due to fuel price hike in the international market also be included in steps.

The other major austerity measures include ban on purchase of new vehicle from the revenue budget. A national daily reported on 27 September that the government was going to purchase luxury cars for ministers, state ministers and deputy ministers by-passing the finance ministry's order involving the cost of Tk 12 crore. The government has also enhanced the perks of president, prime minister and ministers when it has decided to go for the national austerity programme. The salary of the ministers has been raised by 45 percent, while the lawmakers are to enjoy a salary increase of 50 percent. The government had earlier targeted 2005 for converting its vehicles to run of CNG. Only 200 out of 500 cars being maintained by the Directory of Government Vehicles in Dhaka are now driven by CNG.

Bangladesh today is in a deep crisis as its oil dependent economy is bracing itself for the worst with the skyrocketing oil prices in the international market. The oil prices are now striking at US $ 70 a barrel following the recent surge. The situation looks bleak with Goldman Sachs, the global investment banking firm, predicting that fuel price will reach US $ 75 a barrel on an unstable Middle East and Chinese growth spur. The prices of kerosene and diesel have been increased by Tk 4 per litre while the prices of petrol and octane have been increased by Tk 6 and Tk 7 per litre respectively, in spite of the adverse effect on the country's economy.

Soaring oil prices are eating into foreign exchange reserves of the country and have heavily strained the balance of payments position. The country's oil bill is likely to rise around US $ 2 billion in this fiscal year which reached US $ 1.5 billion in the last fiscal marking a 54 percent increase over the previous fiscal year. To address the fuel crisis, the government has decided to go for austerity. The government is expecting to save around Tk 160 crore a year as fuel consumption in the transport sector after introduction of the two-day weekly holiday. According to energy ministry the daily consumption of octane on week days is 390 tons, petrol 394 tons and diesel 1,600 tons on an average. According to power division, during the weekends, power consumption shrinks by around 200 MW. They estimated that around Tk 40 crore can be saved because of the additional 52 weekly holidays. The government is also considering cutting unnecessary expenditure to save more than Tk 6.0 billion as part of its austerity measures in the wake of downward adjustment of customs duty and oil price-hike in the international market. It will also save money by stopping purchase of new cars and utilising contingency fund for making up revenue losses.

The extravagant way in which the government and autonomous bodies have been working over last many years, was frequently been a cause of embarrassment for the nation. For a resource-constrained country, it often becomes a matter of shame when a big delegation travels abroad as entourage to Prime Minister. Austerity ought not to be confined to the matter of restriction on the foreign visit of high government officials only. Ministers' visits to outside the country also call for review as the high expenditures incurred by our foreign missions by way of providing protocol facilities to them often makes a mockery to our economic conditions. The government functionaries use vehicles beyond their allotted number and time. Even members of their families liberally use the government vehicles. This should be stopped forthwith in order to curb the misuse of fuel.

The Daily Start in an exclusive report carried on 25 September said, " Economists are also of the opinion that it is very much possible to shed expenditure by at least Tk 1,000 crore from the current revenue budget. But the government will not be able to attain much in bringing down the expenditure, as the measures it has taken so far are 'merely cosmetic', they observed."

The government also announced austerity programme in August 2004, for rehabilitation of the flood ravaged economy of the country. Calls for austerity have often been made before only to end up without any substantial benefit. Certainly, there are many areas where the government can easily cut down spending. Unless the government becomes serious about austerity adopting stringent measures to slash down unnecessary expenses from public funds, it may leave people infuriated as their sufferings have already been intensified with the fuel price rise. Now the challenge for the government is to adopt proper policies for managing the economy with strict enforcement of austerity measures.

ANM Nurul Haque is a banker.