Bangladesh’s ADP drops 18pc with biggest cuts in health and education

In the slow process of implementing development projects, a large amount of allocation has been cut in the main Annual Development Programme, or ADP, of the current fiscal year.

The amount has been reduced by Tk 4.9 billion, which is 18.49 per cent of the total allocation.

The interim government has reduced the Tk 2.65 trillion ADP for the 2024-25 fiscal year, set by the ousted Awami League government, and revised it to Tk 2.16 trillion.

The largest reduction has been made in the health and education sectors.

On Monday, the National Economic Council, or NEC, meeting at the Planning Commission in Dhaka’s Agargaon approved the revised ADP, or RADP, by reducing the original ADP.

The meeting was presided over by Chief Advisor Muhammad Yunus.

Planning Advisor Wahiduddin Mahmud presented this information after the meeting.

He had earlier spoken about significant cuts in the ADP due to the slowed implementation of development projects amid the changing circumstances of the power transition.

In a brief press conference after the NEC meeting, Wahiduddin said: “Most of the projects in the country’s education sector are corrupt and have been closed due to allegations of corruption.

“Tk 700–800 billion in pensions for teachers under the Monthly Pay Order, or MPO, has been embezzled.

“A DO letter has been given to the finance ministry to resolve this.”

In the budget for the 2024-25 fiscal year, the ADP of Tk 27,828 billion, including the allocation for autonomous institutions, was finalised.

After the reduction, the size of the RADP, including the allocation for expenditure for these institutions, has stood at Tk 22,612 billion — a decrease of 18.72 per cent or Tk 5.216 billion.

After the collapse of the Awami League government on Aug 5 after a mass uprising in July, the first month of the fiscal year, there was a major stagnation in development activities for the first few months.

Many of the contractors and those involved in implementing the projects went into hiding due to political affiliations with the previous government.

After the interim government took office, work on several projects from the list left by the Sheikh Hasina government was halted.

Projects that were deemed unnecessary or not important for political reasons were eliminated.

The current government had repeatedly indicated a need to reduce the cost of major projects, and this was finalised during the NEC meeting.

In the revised ADP, 64 per cent of the total development budget has been allocated to five sectors.

Of these, the transport and communication sector has received the highest allocation, as before, with 22.34 per cent.

Electricity and energy follow with an allocation of 14.77 per cent.

In addition, 9.42 per cent of the RADP has been allocated to the education sector, 9.1 per cent to the housing and community sector, and 7.83 per cent to local government and rural development.

The transport and communication, health, and education sectors are at the forefront of reduced allocations in the RADP, with a total cut of Tk 458.32 billion from these three sectors.

The original ADP for the 2024-25 fiscal year allocated Tk 20.68 billion to the health sector, making up 7.80 per cent of the total allocation.

However, Tk 12.22 billion has been cut, reducing the health sector’s allocation to Tk 8.46 billion, which is now just 3.92 per cent of the total allocation in the RADP.

On the other hand, the education sector had the third-highest allocation of Tk 315.28 billion, which was 11.90 per cent of the total allocation.

In the RADP, 9.42 per cent has been kept, excluding Tk 111.79 billion.

IMPLEMENTATION

According to the Implementation Monitoring and Evaluation Department, or IMED, the total allocation in the ADP for the 2023-24 fiscal year was nearly Tk 2.75 trillion, reduced to Tk 2.54 trillion in the RADP.

By the end of the fiscal year, ministries spent about 80.92 per cent of the targeted implementation.

In the 2021-22 fiscal year, the original allocation was approximately Tk 2.37 trillion, which was revised and reduced to about Tk 2.11 trillion.

The final expenditure was 92.98 per cent.

ADP implementation for the current fiscal year from July to January stands at 21.52 per cent, down from 27.11 per cent last year, marking the lowest rate in the first seven months in the past five years, according to IMED statistics.

The allocation of funds for many projects taken by the previous government was reduced by the interim government, bringing many ongoing projects to a standstill.

Typically, ADP expenditure is low at the beginning of the fiscal year, but this time it has decreased further due to political instability.