The Financial Express

Poor project implementation may lead to cutting development budget

| Updated: January 16, 2021 17:14:07

Poor project implementation may lead to cutting development budget

The annual development programme (ADP) is likely to be revised soon with a significant cut due to poor project execution by the ministries and agencies in the first half of the current fiscal, officials said on Friday.

Many ministries and agencies are seeking lower funds than their current allocations in the original ADP as the Planning Commission (PC) has started to revise the development programme, they said.

The Economic Relations Division (ERD) has already slashed the foreign aid (project aid) portion of the current ADP by 10.64 per cent to Tk 630 billion in the aftermath of COVID, said a senior commission official.

"When we have sought the revision proposals from all the ministries and divisions, many of them have asked for lower funds than their current allocations in the original ADP," he told the FE.

A commission member requesting anonymity said the ADP could be cut by nearly 15 per cent in fiscal year 2020-21 due to the poor execution by public agencies and lower revenue generation as a result of the coronavirus pandemic.

In FY2020, the government had slashed the ADP by only 6.5 per cent to Tk 2.01 trillion from the original outlay of Tk 2.15 trillion.

The allocation of the project aid in the current year is Tk 705.02 billion.

Besides, the original ADP secured Tk 1.34 trillion from the government's internal resources and the remaining Tk 94.66 billion from the funds of the autonomous and semi-autonomous public bodies.

"We have already sent the revised foreign aid allocation to the Planning Commission to frame the upcoming RADP," said a senior ERD official.

Meanwhile, the commission has started work on revising its Tk 2.14 trillion ADP aimed at streamlining the development work in the next half of the current fiscal.

In December, the commission issued a guideline for the ministries and divisions so that they set realistic fund expenditure target in the remaining period of the current fiscal.

"Many ministries and divisions have already sent their revised fund expenditure target to the commission. Most of them have sought lower funds. So, the RADP may see a big cut," he added.

The official said the COVID affected the project implementation in the first half of the current fiscal, prompting the authorities to slash the project aid in the upcoming RADP, he added.

During July-December, the government executed only 24 per cent of the ADP, the state-run Implementation Monitoring and Evaluation Division (IMED) data showed.

In December alone, the public bodies spent only 5.96 per cent of their total ADP allocations, 1.39 percentage points lower than that of the same period in FY2020, the IMED said.

Another senior ERD official said the coronavirus has hit the development project activities hard in last few months as many foreign consultants and contractors could not rejoin work.

He also said: "We have consulted with all the ministries and agencies on the current aid allocations and spending capacity. Many of them have sought lower funds for the upcoming RADP."

Former additional secretary of the ERD Shahbuddin Patwary told the FE that it was a good sign that the government was going to cut the project aid in the RADP at lower rate.

But since the revenue generation faced a shortfall and the project execution was affected owing to the pandemic, the ADP may be downsized significantly while revising, he added.

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