The finance ministry of Bangladesh has suspended the block allocation expenditure for FY 2024-25 to reduce government spending amid challenging economic conditions. This year’s allocation was Tk 6,256 crore, down from Tk 7,285 crore in FY 2023-24. A directive issued on July 4 restricts various government expenditures, including foreign travel.
Block allocations often remain unspent due to a lack of specific plans, leading to waste and misuse. These funds, primarily used by the Local Government Division, support projects for disadvantaged groups and special government initiatives, often approved for MPs to supplement local development funds. Critics highlight the frequent underutilization and mismanagement of these allocations.
Despite the reduction, specialists argue that block allocations are vital for supporting underprivileged groups and female entrepreneurs if managed with clear plans and accountability. The decision to halt these funds could save significant resources and reduce the budget deficit, potentially decreasing domestic borrowing and benefiting private sector credit flow.
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