Health, education face deep cuts in revised ADP as project implementation falters

The country's health, education and transport sectors are set to face sharp funding cuts in the revised Annual Development Programme (RADP) for the 2025-26 fiscal year, largely due to weak project implementation capacity, as the government is set to trim the overall development budget by Tk30,000 crore.

Allocations for health will be slashed by as much as 74%, the biggest casualty of the revision, while spending on education and transport is set to fall by 35%, according to Planning Commission sources.

Power and energy, housing, and agriculture will also see cuts in the revised ADP, which received preliminary approval at an extended meeting of the Planning Commission yesterday, chaired by Planning Adviser Professor Wahiduddin Mahmud.

Infographics: TBS

Final approval is expected on 12 January at a meeting of the National Economic Council (NEC), chaired by Chief Adviser Muhammad Yunus.

Planning Commission officials said the size of the revised ADP stands at Tk2,00,000 crore, down by Tk30,000 crore from government funds and foreign financing. Government funding is being reduced from Tk1,44,000 crore to Tk1,28,000 crore, while allocations from foreign loans and grants are being cut from Tk86,000 crore to Tk72,000 crore.

Health sector bears the brunt

In the original ADP for the current fiscal year, the health sector was allocated Tk18,148 crore. Of this, Tk13,429.52 crore is now being withdrawn due to poor implementation, leaving a revised allocation of Tk4,718 crore.

The health ADP is implemented through the Health Services Division and the Health Education and Family Welfare Division. The Health Services Division, which initially received Tk11,617 crore, has seen its allocation cut by 73% in the revised plan. The Health Education and Family Welfare Division, which had Tk5,902 crore, has had 77% of its allocation withdrawn.

Planning Commission sources said several ongoing health projects have been unable to utilise funds as planned. 

These include the establishment of Patuakhali Medical College and Hospital, construction of 500-bed medical college hospitals and related facilities in Jashore, Cox's Bazar, Pabna and Noakhali, the setting up of cancer, kidney and heart treatment centres in eight divisional cities, and projects to expand kidney dialysis centres in medical college hospitals to 50 beds.

However, many of these projects have only recently been approved, while others are still awaiting approval, contributing to lower overall spending and a reduced allocation in the revised ADP.

In the current fiscal year, 15 ministries and divisions have received only 74.56% of their original ADP allocations, including the two health divisions.

Data from the Implementation Monitoring and Evaluation Division (IMED) show that between July and November, the first five months of the fiscal year, the ADP implementation rate stood at just 1.8% for the Health Education and Family Welfare Division and 3.92% for the Health Services Division.

Like health, the education sector has also seen a major cut. From an original allocation of Tk28,557 crore, the revised ADP reduces spending by about 35%, bringing the figure down to roughly Tk18,500 crore.

Former planning secretary Md Mamun-Al-Rashid said the main reasons for surrendering development allocations were the incompetence of project directors, lack of experience in procurement and weak understanding of project management procedures.

"The government has prioritised the health sector, but because of the incompetence of those responsible for implementation, up to 74% of the allocation is being returned," he said. "In future, such officials must be brought under accountability, and caution is needed when approving new projects."

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), criticised the repeated explanation that health and education fail to spend their allocations due to weak capacity.

"This excuse is not acceptable," she said. "If spending capacity is lacking, it reflects the failure of the concerned ministries and the government. Strengthening skills in project implementation, procurement and management is the government's responsibility."

Transport and other sectors cut

The transport and communications sector, which had the largest allocation in the original ADP, is also facing deep cuts. Its allocation has been reduced by 35%, from Tk58,973 crore to Tk38,332 crore.

The Airport-Kamalapur MRT Line-1 project has seen one of the sharpest reductions. From an original allocation of Tk8,631.43 crore, the revised ADP proposes just Tk801 crore, a cut of more than 90%.

Planning Commission officials said revised allocations are based on demand from implementing agencies. As no demand was submitted for this project, a steep cut was proposed.

The MRT Line-5 Northern route (Hemayetpur-Bhatara) project has also had its allocation reduced by about 60%, from Tk1,490.65 crore to Tk592.80 crore.

Officials of Dhaka Mass Transit Company Limited (DMTCL) said spending had been delayed because international tender processes had not yet been completed.

Other major projects facing cuts include the Matarbari Port Development Project, which is set to return 73.32% of its allocation, and the Hazrat Shahjalal International Airport expansion project, which has been proposed for a 70.52% reduction from its original allocation of Tk1,039.24 crore.

The social protection sector has also been heavily affected, with its allocation cut by 73%, from Tk2,018 crore to Tk545 crore. The power sector is facing a 19% reduction, while agriculture is set to see a 21% cut.

Allocations increase for climate change, local government

In contrast, allocations for environment, climate change and water resources have seen the largest increase in the revised ADP, rising by nearly 20% from the original Tk10,641 crore.

The local government sector has also benefited, with its allocation increased by 12% to around Tk15,000 crore in the revised development programme.