Due to financial constraints, the government is reducing expenditure. After a change in August, most unnecessary projects had their budgets slashed. As a result, the implementation of the Annual Development Program (ADP) is at its lowest point in six years.
In the revised development program, the Planning Commission has decided to cut 49,000 crore taka from the ADP. This means an 18% reduction compared to the total allocation for the 2024-25 fiscal year. A meeting to discuss the proposed revised ADP (RADP) will take place on February 23.
According to sources from the Planning Commission, the Ministry of Finance determined the RADP size to be 2.16 lakh crore taka on January 7. This includes 2.35 lakh crore taka in government funding and 81,000 crore taka in foreign loans.
The ADP allocation for autonomous institutions is separate, totaling 2.65 lakh crore taka, with 1.65 lakh crore from government funds and 1 lakh crore from foreign loans. The revised ADP may allocate 2.16 lakh crore taka, cutting 49,000 crore taka. Of this, 1.35 lakh crore will be from government funds, and 81,000 crore will come from foreign loans.
Meetings with relevant ministries regarding the revised ADP allocation are already underway. Due to the slow pace of ADP implementation in various ministries and departments, the demand for government funds has decreased. Typically, demand for government funds is higher in other fiscal years, but this year, the ceiling for ADP is lower.
Since August’s change in government, several major projects have stalled. Additionally, some contractors have fled.
In the interim government’s revised development budget, allocations for human resource development have been reduced the most. However, this sector should have received the largest allocation, as 65% of the population is in the working age group, but there is no special focus on human resource development.
According to Planning Commission officials, education and health allocations are 55% lower than those for the Local Government Division (LGD) in the current fiscal year. In the proposed RADP, the total allocation for health and education will be 23,432 crore taka, while LGD will receive 36,196 crore taka.
The proposed RADP will also cut health allocations by almost 50%. In the original ADP, the health sector received 11,153 crore taka, which has been reduced to 5,669 crore taka in the revised budget. Similarly, funding for primary and mass education has been reduced from 16,135 crore taka to 12,764 crore taka.
Planning Commission officials stated that the health ministry faced pressure to cut its allocation due to inefficiencies in project implementation, as the sector had spent only 5.15% of its annual development budget during the July-January period, far below the average expenditure rate of 21.52%.
Similarly, the Ministry of Primary and Mass Education and the Ministry of Secondary and Higher Education have had poor project implementation rates, leading to cuts in their allocations.
On the other hand, the Local Government Engineering Department (LGED) has demonstrated better project implementation capabilities, so its allocation has been reduced less. The department is working on infrastructure development for rural Bangladesh’s socio-economic progress.
The power sector’s allocation has been cut from 33,717 crore taka to 21,475 crore taka in the proposed RADP for the 2024-25 fiscal year.
The Road and Highways Department will receive 18,624 crore taka, the Ministry of Science and Technology will receive 12,129 crore taka, the Railway Ministry will get 10,228 crore taka, the Water Resources Ministry will be allocated 10,211 crore taka, the Ministry of Shipping will get 7,154 crore taka, and the Bridge Division will be allotted 5,848 crore taka in the RADP.
Liberty News’ economic correspondent states that the proposed RADP allocates 48,253 crore taka (22.34%) for transport and communications, 31,898 crore taka (14.77%) for electricity and energy, 20,349 crore taka (9.42%) for education, and 19,646 crore taka (9.16%) for housing and community services.
LND/BAIZID
