Govt to move away from subsidies: PM

Prime Minister Sheikh Hasina today said that steps must be taken to reduce and finally stop government subsidies.

The government is devising ways to stop providing subsidies, especially in the gas and electricity sector, Planning Minister MA Mannan said quoting the prime minister.

He briefed reporters about this new directive following the weekly meeting of Executive Committee of the National Economic Council (Ecnec) on Tuesday afternoon.

State Minister for Planning Shamsul Alam said subsidies in agriculture would continue. However, subsidies in the industrial sector will be reduced.

The government no longer wants to subsidise industrial and luxury areas, he said adding that subsidies in agricultural and slum areas will continue.

If 85 million cubic feet (MCF) of imported LNG is added to the national grid every day to meet the demand for gas in the country, the government's subsidy will stand at around Tk25,000 crore in the current fiscal year alone, which is more than six times the budgetary allocation in FY22.

But in the current fiscal year's budget, only Tk4,000 crore has been allocated to subsidise LNG, of which Tk1000 crore was disbursed so far. The Finance Division suggested hiking gas prices as it is not possible to meet Petrobangla's demand with the budgetary allocation.

The government gave Petrobangla Tk1,000 crore in LNG subsidy in FY19, Tk2,500 crore in FY20 and Tk2,812 crore in FY21.