Next ADP likely to be worth Tk 2.30t

A relatively fat development budget worth Tk 2.30 trillion is likely to be prepared for the next fiscal year, too, by the interim government notwithstanding a staggeringly low execution of the outgoing ADP.      

By official count, only a fourth of the total annual development programme or ADP for the fiscal year 2024-25 had been implemented in eight months to this February. Also, its size underwent a significant pruning.

The size of the ADP in the upcoming financial year may set at Tk 2.30 trillion to meet fund demands made by different ministries and divisions, finance ministry officials said.

However, the finance officials find the new ADP outsized compared to the implementation capacity of the ministries and presume that it will also remain largely unimplemented.

The original ADP allocation for the outgoing fiscal year  2024-25 was Tk 2.65 trillion which was revised down by Tk 49 billion to Tk 2.16 trillion earlier this month following a big implementation gap.

Data show that the ADP-execution rate during the July-February period of FY25 was 24.27 per cent, 6.91-percentage-point lower than that of the same period of the past fiscal year.

The spending happens to be lowest in last 14 years, which reflects the agencies' inabilities to improve up their under-par implementation abilities.

In the same period in the previous fiscal year, the ADP-execution rate was 31.18 per cent of the total allocation, data available with the Implementation Monitoring and Evaluation Division (IMED) show.

Officials see political instability from the very beginning of the current fiscal year and an "inactive" administration following regime change as drags behind the slow implementation of the development programme. 

They fear that this fiscal's ADP implementation could be one of the lowest in the country's history and the agencies may fail to spend the entire funds given to them in the revised ADP, too.

Finance Division secretary Dr Khairuzzaman Mozumder Tuesday said proposals were there to remove the less-important projects and that the government was now doing the trimming.

He aid the ADP came down from Tk 2.65 trillion to Tk 2.16 trillion in the revised budget. "Even then, there is still a lot of money which the ministries and divisions are unable to expend."

Dr Zahid Hussain, a former lead economist at World Bank's Dhaka office, thinks Tk 2.30-trillion ADP for next fiscal year will be big one considering the implementation capacity of the agencies and the trend in government revenue earnings.

"Had the government succeeded in enhancing foreign financing, the size of ADP could have been increased by raising budget deficit," he told The Financial Express.

Mr Hussain attributes low disbursement of foreign aid to non-functional administration -- evidently under the hangover of uncertainty following the turbulence associated with the changeover.      

"There is US$45 billion in the pipeline but how much the implementation capacity can be increased in a year?" he asks.

The economist feels that the government needs to further lower the size of the next ADP through "considering the financing trend".

syful-islam@outlook.com