Tk 891.62b earmarked for subsidy, incentive in proposed budget

The interim government has allocated Tk 891.62 billion for payment of subsidies and incentive in the proposed budget for the fiscal year FY 2025-26.

The proposed amount is Tk 199.53 billion lower than that of the revised budget for FY 2024-25, Finance Advise Dr. Salehuddin Ahmed said while presenting the national budget on Monday.

However, the proposed allocation on the account of subsidy and incentive for FY 2025-26 was Tk 8.79 billion higher than that of the original budget for the FY2024-25.

The government is to pay subsidies for sectors like agriculture, local government and rural development purposes, defence services and social security and welfare.

It has to count a significant amount of subsidy on account of selling electricity, agri-inputs and key essential commodities at lower than their production or procurement cost and pay a considerable amount as export incentive also.

At present, the amount of subsidies given in the power sector is estimated at about 1 per cent of the country's GDP, which is very high, the finance adviser said in his budget speech.

He, however, mentioned that a plan had been taken to reduce the overall cost of power generation by 10 per cent, aiming to help lessen the power subsidy by around Tk 110 billion annually.

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