Loading...
The Financial Express

Domestic funding for development budget unlikely to be cut

Changing Covid scenario makes govt. hopeful about higher revenue generation


| Updated: February 16, 2021 10:13:29


Domestic funding for development budget unlikely to be cut

The government has decided to keep the domestic resource allocation in the annual development programme (ADP) for the current financial year unchanged.

The budget for the FY2021 is now undergoing a revision, officials said.

The external assistance component of the ADP has already been cut by 10.64 per cent or around Tk 75 billion, they added.

"We've already informed the Planning Commission that we are not slashing the domestic resources for the ADP this year," a senior finance ministry official told the FE.

For fiscal year (FY) 2020-21, the total ADP outlay was Tk 2.14 trillion. Of the amount, Tk 1.34 trillion was government's portion and Tk 705 billion project aid.

On the other hand, Tk 94.66 billion came from autonomous bodies and corporations against 89 projects.

The government has set a target of collecting Tk 3.3 trillion in revenue in FY 2020-21.

During the July-December period of this fiscal, some 1.104 trillion could be collected, up by 3.95 per cent, than Tk 1.06 trillion in the same period of last fiscal.

Another senior official at the finance ministry told the FE that the Covid-19 situation is easing with the beginning of vaccination worldwide.

Businesses are seeing normalcy gradually while the country's export-import trade is also picking up, raising hopes for increased revenue collection in the days to come, the official said.

"We're expecting the revenue collection to rise significantly soon. So, providing required funds for development projects won't be a problem for the government," he added.

The official said the ministries were initially told not to spend more than 70 per cent of funds allocated for development programmes this year.

"Now, we have asked them to spend up to 85 per cent as fund flow is quite good," he added.

The official further said that it now depends on the ministries and divisions concerned how much they can spend from the allocations.

The ministries are conducting meetings of the budget management committee. Later, they will tell the ministry how much they can spend this fiscal.

Figures, however, show ADP execution during the July-December period of FY 2021 was lower than average, with only 24 per cent implemented so far.

The implementation until December was found 3.0 percentage points lower than that of the last fiscal.

In the first half of FY 2020, the government agencies implemented some 27 per cent of their ADP.

However, Bangladesh received 10 per cent higher foreign aid during the period compared to the corresponding period of the previous fiscal year.

In the first half of FY 2021, foreign development partners released loans and grants worth $2.99 billion, up from $2.72 billion during the same time of FY 2020.

[email protected]

Share if you like