No new dev project

Apparently passing through financial hardships owing to shortfall in revenue earnings during this ongoing Covid pandemic, the government has limited its expenditure on procurement by slashing spending on development works during rest of the period of the outgoing fiscal.

As part of this, the cabinet committee on public procurement on Wednesday decided not to give go-ahead to any public work for construction related projects till June 30 this year.

Finance Minister AHM Mustafa Kamal informed this after a meeting of the committee.  "In the meeting, five proposals were placed on the construction of flats for the government employees of the Ministry of Housing and Public Works. We did not consider any of them," he told media.

"No approval will be given to projects on public works until June 30," said the minister.

"However, works of the ongoing projects and foreign-funded projects will go on." The minister spoke in a virtual meeting after a meeting of the cabinet committee on public procurement.

Meanwhile, the government's tax revenue collection efforts this fiscal faced a setback because of the latest lockdown.

The National Board of Revenue (NBR) could collect tax revenues equivalent to 50 per cent of the original target, set for the July-February period of the FY.

However, the amount collected was 4.55 higher than that of the corresponding period of the previous year. Taxmen are optimistic about better revenue collection in the last quarter of the current FY.

The Q4 is the most productive period for the National Board of Revenue (NBR). During the period, it collects almost half of its total annual earnings.

If the current phase of the lockdown goes beyond one week, tax officials said, the VAT collection at the local level might suffer.

Achieving the revised revenue might become difficult. During the first eight months of the current FY, the tax collection had been picking up, taxmen said.

Due to a significant shortfall, the finance division had revised down the FY's collection target to Tk 3.01 trillion from the original target of Tk 3.30 trillion.

Following the setback, the NBR could collect Tk1.53 trillion in revenue until February last, registering a 4.55 per cent growth over the corresponding period of last FY, according to provisional data of NBR.

The revised target for July-February period was Tk 2.0 trillion.

However, the tax collection grew by 10 per cent in the month of February alone as compared to the same month last year.

Earlier, Prime Minister Sheikh Hasina has repeatedly warned concerned for reducing unnecessary hike in project costs in the name of extension of time and project size. 

Expressing displeasure over frequent revisions of projects, she recently directed the authorities to take legal action against those responsible for flawed project designs that ultimately push up costs.

She asked to identify those whose negligence resulted in flawed designs of projects, wasting time and money. 

Expressing dissatisfaction over inclusion of new components in projects during revisions, the PM said, "It's a dangerous thing. A PD [project director] takes up the responsibilities of several projects and stays in Dhaka.

"It's often seen that a few items [components] get included during revisions of a project," the planning minister quoted the PM as saying.

"She then asked: 'didn't you [project directors] visit the project sites and see these things? Why these things were not raised earlier?'," Mannan said quoting the PM.

The premier also gave directives to prepare a master plan so that no bridge or culvert is constructed without proper assessment and feasibility study.

In the recent years, several incidences of fraudulence in costs of some development projects were unearth that raised questions of quality utilization of public funds. 

Regarding bridge construction projects, the premier asked the relevant authorities to be careful so the bridges are built in suitable sites without doing favour to anyone. The bridges will have to be constructed in places where people are benefited.

Hasina asked the officials concerned to encourage new contractors to not violate the law while bidding for government projects, and warned against appointing the same person as project director of more than one project.

"Such practice won't be tolerated," she said asking the Planning Minister to take proper measures in this regard.

The NBR may hardly collect Tk 2.40 trillion in tax revenue in the current fiscal year, NBR sources said. The government has adopted a conservative approach relating to its spending and it spent only 29 per cent of the development expenditure so far. Until February last, the VAT collection at local stage grew by 3.27 per cent while income tax 5.05 per cent and customs duty 7.86 per cent.

However, the NBR fell short of its revised collection target by Tk 430.43 billion until February last.

The VAT wing faced the highest shortfall of Tk173.37 billion, followed by customs Tk 161.56 billion and income tax Tk 95.49 billion against their respective targets.