RADP sees highest block allocation

Although all of the ministries and divisions of the government collectively placed their demand for Tk 1.91 trillion to implement all of the ongoing development projects in the current fiscal year, the Planning Commission has allocated Tk 248.87 billion (13.02%) more than the requested amount in the Revised Annual Development Programme (RADP).

This excess amount has been incorporated into the RADP under the title "Assistance in Special Needs" as a "Block allocation" in favour of the Programming Division under the commission, reveal the minutes of the meeting of the National Economic Council (NEC) held recently.

Since this huge allocation has been made without specifying the ministries, divisions, sectors, or projects, the block allocation in RADP has surged to Tk 266.32 billion -- the highest in the country's history.

At the beginning of the fiscal year, the original ADP included Tk 63.29 billion as block allocation. The revised block allocation has increased 4.21 times.

"Since available resources exceed the demand, the surplus funds are being retained by the Planning Commission as development assistance for special needs after meeting the requested allocations," said Iqbal Abdullah Harun, Secretary at the Planning Division and also member of the Programming Division at the commission, at the NEC meeting.

He further said that the surplus allocation would be revised and redistributed based on future demands, according to the NEC meeting minutes.

The NEC recently approved RADP worth Tk 2.16 trillion for the current fiscal year lower by Tk 490 billion than the original ADP worth Tk 2.65 trillion.

The size of the RADP has declined 18.49 per cent -- a 18.18 per cent cut in allocation from the domestic resources and a 19 per cent drop in funds from foreign loans and grants.

Planning Commission officials stated that different ministries and divisions submitted a collective funding request for Tk 1.91 trillion including Tk 1.21 trillion from the domestic resources and Tk 702.38 billion from the foreign sources.

However, based on allocations from the Finance Division, the RADP has been set at  Tk 2.16 trillion comprising Tk 1.35 trillion from the government's own funds and Tk 810 billion from project assistance.

A review found that for the 2019-20 ADP to the 2021-22 RADP, block allocations remained limited to around 0.5 per cent of the total allocation. In the 2022-23 ADP, it stood at 0.47 per cent, but later surged to 1.66 per cent in the RADP.

Since then, both the block allocation and its share in the total budget have been steadily increasing.

The data for the current fiscal reveal that Tk 41.80 billion has been allocated in the RADP for special assistance across nine sectors, including Union Parishad, Upazila Parishad, Zila Parishad, City Corporation, and the Chattogram Hill Tracts Development Council.

Official data of the Implementation, Monitoring and Evaluation Division of the planning ministry reveals that all of the ministries and divisions spent only 21.54 per cent of the ADP in the first seven months of the current fiscal.

Towfiqul Islam Khan, Senior Research Fellow at the Centre for Policy Dialogue (CPD), stated that, given the current performance, utilizing the full RADP within the last five months of this fiscal would be highly challenging, and spending any amount from the block allocation would be virtually impossible.

Speaking to The Financial Express, he noted that the Planning Commission had already significantly revised down the ADP, and allocating a large sum under block allocation might not be prudent.

He also pointed out that ministries and divisions had been requesting for lower allocations, signaling a slowdown in implementation in the near future.

Mr Khan urged the government to take proper measures to accelerate work on projects funded by foreign aid, especially those scheduled for completion within the current fiscal year.

 Jahid.rn@gmail.com