The implementation of the Annual Development Programme (ADP) in the first six months of the current fiscal year has stagnated at 18%, a marked decline from the 22% recorded in the corresponding period last year.
The revelation came from Planning Adviser Wahiduddin Mahmud following the latest meeting of the Executive Committee of the National Economic Council (ECNEC) on Sunday (2 February).
In the meeting, chaired by Chief Adviser Muhammad Yunus at the NEC Conference Room in Sher-e-Bangla Nagar, approval was granted for 13 projects with an aggregate expenditure of Tk12,532 crore.
Of this sum, Tk7,328.95 crore will be sourced through project loans, Tk4,097 crore from government financing, and Tk1,106 crore from various implementing agencies' own funds.
Acknowledging concerns over mounting debt repayments, he conceded that interest payments on megaproject loans are already exerting pressure on the economy, a burden that will intensify in the coming fiscal years.
However, he defended the government’s debt strategy, citing Vietnam as an example of a country that successfully leveraged foreign loans without economic distress.
ADP Execution Slows Further
The ADP implementation rate in the first half of the fiscal year stood at 17.97%, a significant decline from 22.48% in the previous year and 23.53% in 2022-23.
Ministries and departments managed to spend Tk50,000 crore between July and December, compared to Tk61,740 crore in the previous year and Tk60,249 crore in 2022-23.
Surging Debt Servicing Burden Looms
Commenting on the fiscal outlook, Wahiduddin Mahmud underscored a structural shift in budgetary management, with foreign financing set to constitute 60% of ADP funding, while domestic contributions will account for 40%.
The decision stems from stagnant revenue generation, though initiatives to bolster tax income are also in the pipeline.
Despite the increased reliance on foreign loans, he assured that such borrowing would be allocated to productive sectors, particularly export-driven industries.
