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The Financial Express

Foreign-aided development budget unlikely to be cut

| Updated: December 06, 2020 09:51:01


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The government would not have to cut much from the project aid (PA) in the current fiscal year (FY2020-21) as the preparatory consultations on the upcoming revision of the Annual Development Programme (ADP) concluded on Thursday, officials said.

Despite the Covid-19 pandemic has severely affected implementation of the projects, they said the ministries and government agencies having larger stakes in the development budget already exuded their confidence to be able to utilise the foreign aid until the end of the FY.

Only some ministries and divisions with comparatively less allocations have requested cutting the PA as they thought it would be difficult for them to spend it in the remaining half of the FY2020-21, a senior official at the Economic Relations Division (ERD) said.

"But, some of the ministries had sought even higher allocation in the revised ADP, or RADP. So, we think the PA in the current development budget may not have to cut much."

Officials said the ministries of road transport and bridges, railway, heath and education, the power division and local government division, and some other government agencies having larger stakes in the PA expressed their commitment to spend the entire allocation in the original ADP.

The ERD official said the details on the revised allocations could be known following their homework on the consultations with the ministries and government agencies over the last two weeks.

Amid the Covid impact on the project implantation, the ERD started consultations with all the ministries and divisions on November 22 last.

The government had allocated the PA equivalent to Tk 705.02 billion from the Tk 2.14 trillion ADP for the current FY.

"In most cases, the project work was hampered due to the coronavirus impact. So, we have decided to revise the PA," said another ERD official.

The Covid-19 has severely affected execution of the development projects in Bangladesh as the government ministries and agencies have implemented only 12.8 per cent of the ADP in the first four months (Jul-Oct) of the current fiscal year, which was lowest in five years.

Among the execution rate, the utilisation of the project aid was lower than expectation during the period.

According to the Implementation Monitoring and Evaluation Division (IMED), all the ministries and agencies during July-October period executed only 11.75 per cent of their total Tk 705.02 billion PA allocations in the ADP for the current FY2021.

The ministries and agencies usually implement foreign aid supported projects under the ADP where the development partners finance the schemes.

The ERD official told the FE that every year they used to revise the ADP by slashing the project aid allocations against different projects.

But this year, the reality was different as many ministries and divisions were seeking higher or similar funds they got at the original development budget, amid the impact of the coronavirus, he added.

So, they were thinking about becoming realistic on the PA allocations so that the ministries and agencies could implement the remaining works with highest sincerity, the ERD official said.

He said many of the foreign aid-backed projects, including the Japanese large and mega projects, were affected mostly as the foreign consultants, contractors and workers had failed to continue their works in Bangladesh due to lockdown and coronavirus pandemic.

But the project works have now picked up again after restarting the economic activities in June last, the official added.

The ERD official said that since the consultation meetings are over, they would finalise the revised PA allocation within this month.

And then, they would send it to the Planning Commission for finalising the RADP for the FY2021, he added.

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