Agriculture Reference
In-Depth Information
TABLE 5.6 Reduction in subsidy bills in public food account
Subsidy bills
Subsidy bills
Exchange rate
Year
(million Tk)
(million US$)
(Tk/US$)
Pre-reform period
1982/83
1,930.00
81.1
23.8
1983/84
1,600.00
64.2
24.94
1984/85
2,500.00
96.3
25.96
1985/86
1,410.00
47.2
29.89
1986/87
500
16.3
30.63
1987/88
4,700.00
150.4
31.24
1988/89
6,443.20
200.1
32.14
1989/90
6,487.10
197.1
32.92
1990/91
3,900.00
109.3
35.68
1991/92
3,610.00
94.6
38.14
Average
3,308.03
105.66
30.53
Total
33,080.30
1,056.60
Postreform period
1992/93
1,710.00
43.7
39.14
1993/94
1,670.00
41.8
40
1994/95
2,730.00
67.9
40.2
1995/96
2,970.00
72.7
40.84
1996/97
3,450.00
80.8
42.7
1997/98
3,890.00
85.6
45.46
1998/99
3,290.00
68.5
48.06
1999/2000
3,630.00
72.2
50.31
2000/01
3,350.00
62.1
53.96
2001/02
3,390.00
58.3
57.43
Average
3,008.00
65.36
45.81
Total
30,040.00
683.6
Reduction in subsidy
3,040.30
403
SOURCE : Subsidy figures from published budget documents for the relevant years of the Ministry
of Finance. Exchange rates of relevant years are from GOB (2003) (Bengali version), 203.
through international tender of rice and wheat for the same period. Our estimates
suggest that the savings stand at about US$919 million, or US$92 million per
year (Table 5.8). One can question the relevance of calculating savings at inter-
national free-on-board prices, as the payment for internal procurement is made
in local currency. The comparison, however, rests on the ground that in a situa-
tion in which the government is forced to import, the import parity price should
be the basis of calculation. It may also be argued that for obtaining a more real-
istic and credible comparative picture for savings arising out of reform mea-
sures, the procurement quantum appears more relevant than the quantity distrib-
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