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Defence overtakes farm in subsidy

MPs know nothing about spending, Public Expenditure Review Commission report says

REJAUL KARIM BYRON
In addition to getting the highest budgetary allocation, the defence sector gets more in subsidy than agriculture.
But parliamentarians never know how the defence budget is spent, according to a report of the Public Expenditure Review Commission (PERC).
The PERC believes that in the absence of a well-thought-out national defence policy, the formulation of defence budget carries the potential risk of wasting public
money as well as not equipping the defence forces as per their needs.
Using public finances the defence establishments acquire assets and properties. But they don't deposit revenues earned from those assets to the national exchequer.
The defence ministry showed absolute indifference to resolving audit objections, the PERC reported.
Raising questions about defence expenditure, the commission maintained that every year the government gave huge subsidies to
defence, export and agriculture sectors.
The current budget allocated Tk 1,226 crore in subsidy. The money is supposed to be spent on food, agriculture, fertiliser and export.
Of this, Tk 602 crore was allocated for boosting export, Tk 200 crore for agriculture and related sectors, and another Tk 334 crore for food.
But almost the entire amount of subsidy for food has gone to the defence and law enforcing agencies.
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Of the Tk 334 crore food subsidy, the armed forces got Tk 208 crore, police Tk 48 crore, ansars Tk 23 crore and BDR Tk 14 crore. The finance division and the jail directorate together got around Tk 50 crore.
The PERC defines food subsidy as the difference between the economic price of food and its distribution price.
Using the definition, the PERC report showed that the economic price of a tonne of rice in the current fiscal was Tk 15,396 and a tonne of wheat Tk 12,551. But the defence sector has been given rice and wheat at a price of Tk 2,110 and Tk 1,776 a tonne.
Again, once various departments in the defence sector receive food at a subsidised rate, the same goes to the defence personnel at a further subsidised price through rationing. Therefore, the food subsidy for defence follows a two-tier system.
The PERC report separately raised questions about defence budget. It observed that there was a 20-year old clear-cut directive of the finance division about how the defence budget should be formulated, but it was not followed.
The PERC noted that while getting approval for allocation in the parliament, the defence budget offers no break-up of costs while all other sectors elaborate on their expenditure. As a result, the parliament never knows how the defence money is spent.
It noted that the defence budget has gone up by 48.99 per cent or Tk 1,275 crore from 1997-98 up to the
current fiscal. No other sector, excepting education and health, got such a raise in allocation.
Quoting an audit report, the PERC said that using public finances the defence establishments build, acquire and purchase various properties like land and cinema halls. But the revenues earned from these properties are not deposited with the public coffer.
In the 1999-2000 fiscal alone, the defence establishments did not deposit revenues worth Tk 64.97 crore coming from its assets.
The current revenue budget allocates Tk 3,938 crore for defence. It is followed by primary education and education ministry (Tk 3,802 crore), health (Tk 1,325 crore) and home ministry (Tk 1,669 crore). However, combining the revenue and development budgets, primary education and the education ministry get the highest allocation of Tk 6,710 crore, followed by communications (Tk 4,358 crore) and defence (Tk 3,947 crore).