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Govt Proposes Record Increase in Power Subsidies

Industry: Energy & Power, Power

The draft FY24 budget in Bangladesh reveals a significant increase in subsidies for the power sector, even though gas, fuel, and electricity prices have been frequently raised in recent months. The proposed budget allocates Tk 33,775 crore for the power and energy sectors, an increase of Tk 7,700 crore compared to FY23.

Additionally, a subsidy of Tk 25,000 crore is proposed for the power sector, marking a Tk 6,000 crore rise from the 2022-2023 fiscal year. While experts view the International Monetary Fund’s subsidy withdrawal condition positively, they argue that the government’s strategy of raising energy prices to tackle fiscal pressure burdens consumers. Suggestions include curbing unnecessary expenditures, addressing corruption in the sector, phasing out expensive rental power plants, and evaluating contracts for idle power plants. The draft budget also includes increased allocations for food, agriculture, and power, with a focus on paying previous arrears.

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