All ministries and divisions of the government spent Tk1,46,376 crore to implement the Annual Development Programme (ADP) in the July-May period of the current fiscal year, which is only 57.54% of the total allocation under the revised ADP (RADP), according to a report by the Implementation Monitoring and Evaluation Division (IMED) of the Planning Ministry.
The report revealed that ADP implementation in the same period of the last fiscal year was 61.73%, representing a significant drop in development spending by 4.19 percentage points in a year.
Analyzing the May issue of the RADP implementation report, made available on Wednesday by the IMED, it was found that an amount worth over Tk1 lakh crore needs to be spent in June, the last month of the fiscal year, to achieve the goal of 100% RADP implementation.
Economists and experts believe that it will not be possible to achieve 100% ADP implementation by spending such a huge amount of money in just one month. They also said that government money might be wasted if the quality of work remains uncertain due to the haste to achieve the goal of full RADP implementation.
The series data from the IMED revealed that RADP implementation ranged from 60% to 70% since the fiscal year 2010-11 and dropped to 57.37% in the fiscal year 2019-20 due to several prolonged lockdowns to prevent the spread of Covid-19.
The revised ADP implementation in the current fiscal year is the slowest in the last 14 years, except for the year of Covid-19. ADP spending in May as a single month dropped by about 22% compared with ADP spending in May of the last fiscal year, according to the IMED.
The report found a total expenditure worth Tk 21,060 crore in May of the current year, which was Tk26,958 crore in May of last year. ADP spending in May declined by about Tk5,898 crore compared to May of last year.
The National Economic Council (NEC) approved an ADP worth Tk2,74,678 crore at the beginning of the fiscal year, with Tk1,69,000 crore sourced from the government exchequer, Tk94,000 crore from foreign aid, and the remaining from the funds of project implementing agencies.
However, the NEC revised down the allocation to Tk2,54,392 crore, drawing Tk1,61,500 crore from the government and Tk83,500 crore from foreign aid, due to sluggish progress in implementation.
Full ADP Implementation becomes difficult despite Tk20,286 crore revision
The report revealed that all agencies spent Tk84,113 crore, which is 52.08% of the allocation from the government exchequer, down from 57.41% in the last fiscal year. The implementation rate from the government fund in the current fiscal year is even lower than during the Covid-19 impacted fiscal year 2020.
Implementation from project aid from foreign sources stood at 65.81%, substantially lower than the previous fiscal year's 70.86%.
The slower ADP implementation reflects the government's fund crunch, said Dr. Ahsan H. Mansur, economist and executive director of the Policy Research Institute of Bangladesh.
He said that the implementing organisations do not have the capacity to complete the work under the ADP, and the government lacks the financial capacity to fund the full RADP implementation.
He also mentioned that the failure in revenue mobilization has made it challenging for the government to meet the financing needs of development activities. The concerned institutes are also failing to ensure the disbursement of foreign aid by complying with the conditions set by development partners.
Commenting on the need for some austerity in government expenditure to deal with inflationary pressure, he said there will be no major problem for the economy if the revised ADP is not fully spent. Instead, he emphasized that as much as possible should be spent to ensure maximum value for government money by ensuring transparency and quality of work.
However, he advised caution in financing important development projects, especially those nearing completion amid the financial crisis.
The Local Government Division spent Tk27,547 crore, the highest among all ministries and divisions. The implementation rate of the division stood at 64.13% of the allocated Tk42,957 crore for 263 projects.
The Power Division spent the second highest amount, Tk23,153 crore, which is 77% of the allocated Tk30,064 crore, while the Road Transport and Highways Division spent the third highest amount, Tk14,673 crore, which is 52.78% of the allocation.
The report revealed that the top 15 ministries and divisions received an allocation of Tk1,96,358 crore to implement the RADP and spent 62.06% of their allocation.
