TCB’s income deficit rises 460% amid expanded food support

The Trading Corporation of Bangladesh (TCB) recorded around a 460 percent rise in its income deficit in the last fiscal year, due mainly to expanded distribution of essential goods to low-income households amid high inflation.

TCB's deficit reached Tk 7,876 crore on a revised basis at the end of FY2024-25, nearly six times higher than the Tk 1,406 crore a year earlier, according to the Bangladesh Economic Review.

The finance ministry usually publishes the review in June. But the ministry released it recently this time to reflect full-year data rather than six-month figures.

The review also changed its terminology, referring to surplus and deficit instead of profit and loss for state-owned enterprises. According to the review, many of the enterprises do not run solely for profit.

Among all state-run entities, TCB posted the second-highest deficit in the last fiscal year.

The Bangladesh Power Development Board (BPDB) topped the list with a deficit of Tk 8,803 crore, up about 4 percent from the previous year, although still below the Tk 11,163 crore shortfall recorded in FY2022-23.

Md Shahadot Hassin, spokesperson of TCB, said the corporation received subsidies of around Tk 2,800 crore last fiscal year, an amount that rose after the agency expanded its coverage to 1 crore families.

In 2022, TCB moved away from truck sales and began distributing food essentials at subsidised prices to 1 crore households through family cards.

"We are not working to make a profit, but we are working to give service to low-income people," said Hassin.

He said the corporation sold goods below procurement cost, leaving it dependent on government subsidies to continue operations.

Inflation stood at 8.29 percent in November. It remained elevated for more than two years, continuing to put pressure on households, especially those with fixed or low incomes.

Some economists argue that the rise in TCB's deficit also reflects inefficiency and mismanagement.

M Masrur Reaz, chairman and chief executive of Policy Exchange Bangladesh, said TCB's large deficit was understandable given its wider impact on low-income households. However, he said inefficiency, leakage and mismanagement also contribute to losses across state-run firms.

Apart from TCB, several other state-run firms also posted substantial deficit. Bangladesh Sugar and Food Industries Corporation, Power Grid Bangladesh, West Zone Power Distribution Company and Dhaka Electric Supply Company Limited each recorded a deficit of more than Tk 200 crore.

Reaz said the government needs to reassess the state-owned enterprise framework, as many of these entities place a heavy burden on the public purse. "Financial discipline is also weak for many."

He added that privatisation of some firms could be part of the solution.

In the last fiscal year, the combined surplus of all state-owned enterprises fell 13 percent year-on-year to Tk 45,330 crore.

Titas Gas was the largest surplus generator, posting Tk 35,298 crore, about 2 percent higher than the previous year.

Bakhrabad Gas Distribution Company reported a 5 percent increase to Tk 5,162 crore, while the Bangladesh Telecommunication Regulatory Commission ranked third despite a 23 percent drop in surplus to Tk 3,187 crore.

Other entities with surpluses above Tk 2,000 crore included Pashchimanchal Gas, Chittagong Port Authority, Bangladesh Petroleum Corporation and the Civil Aviation Authority of Bangladesh.

The Chittagong Port Authority has recorded steady growth in surplus since FY18, rising from Tk 509 crore in FY21 to Tk 2,297 crore by the end of FY25.

Bangladesh Petroleum Corporation remained in surplus despite a sharp decline in recent years. Its surplus fell by about 48 percent to Tk 2,050 crore in FY25, after posting a deficit of Tk 1,983 crore in FY22.