Govt slashes FY26 ADP by Tk350b amid revenue shortfall

All ministries are set to receive an allocation of Tk 2.16 trillion for ongoing projects under the Annual Development Programme (ADP) for the upcoming 2025-26 fiscal year against Tk 2.08-trillion demand made by the implementing agencies.

However, this allocation falls short of the total funding requested by ministries and departments, leaving a gap of Tk 120.35 billion or 5.91 per cent less than the total demand for project implementation.

Including some block allocation and special assistance for several agencies under the local government division, the planning commission has formulated ADP worth Tk 2.30 trillion, of which Tk 1.44 trillion will come from the government exchequer and Tk 860 billion from foreign sources.

The division has scheduled a meeting of the extended committee of the planning commission to be held on May 6 with Planning Adviser Dr Wahiduddin Mahmud in the chair, said officials of the commission.

Data from the planning commission reveals that the ADP for the current fiscal year was Tk 2.65 trillion, with Tk 1.65 trillion from the government funds and Tk 1.0 trillion from foreign loans and grants.

As a result, the size of the ADP for the next fiscal year is set to be reduced by Tk 350 billion, marking a 13.21 per cent decline. Funding from government's own resources will decrease by 12.73 per cent, while allocations from foreign loans and grants will see a sharper cut of 14 per cent.

Officials said that the government initially projected an ADP worth over Tk 2.54 trillion for the next fiscal year. However, the projection was reduced by Tk 243.93 billion due to a shortfall in revenue generation amid economic slowdown and poor ADP implementation in the current fiscal year.

According to data, the Local Government Division is set to receive Tk 400.24 billion-the highest allocation among all ministries and divisions. However, it still falls short of its total requirement by Tk 64.28 billion.

The Road Transport and Highways Division will receive the second-highest allocation of Tk 318.28 billion, facing a funding shortfall of Tk 39.05 billion. In contrast, the Power Division is set to receive Tk 209.07 billion-Tk 20.92 billion more than its projected demand of Tk 188.15 billion.

The significant reduction in the ADP, especially from both domestic and foreign sources, reflects the government's tight fiscal space amid sluggish revenue growth and underperformance in project implementation, said Dr Mustafa K Mujery, former director general at the BIDS.

He said that while prioritising key sectors like local government and infrastructure is understandable, the funding gap may hinder the timely execution of critical development projects, further straining economic recovery efforts.

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