ADP implementation at record lowest 41% in 10 months of FY25
During the same period of the last FY2023-24, the implementation rate was 49.26%, and it was 50.33% in 2022-23
Highlights:
- Tk93,424.83 crore spent from Revised ADP allocation in July-April of FY25
- Spending in this period Tk31,890.85 crore less than in same period of FY24
- Implementation low due to political changes, revised projects, adviser says
There are only two months left before the current fiscal year of 2024-25 ends, yet the ministries, divisions, and departments concerned have not managed to spend half of the Annual Development Programme (ADP) allocation.
In the 10 months (July to April) of FY25, ministries and divisions utilised only 41.31% of the allocated funds — the lowest ADP implementation rate on record, according to a report published by the Implementation Monitoring and Evaluation Division (IMED) today (19 May).
During the same period of the last FY2023-24, the implementation rate was 49.26%, and it was 50.33% in 2022-23.
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According to IMED data, in the first 10 months of FY25, government development spending was Tk31,890.85 crore less than in the same period of FY24.
During this period, Tk93,424.83 crore was spent from the Revised ADP allocation. In comparison, Tk1,07,612.45 crore was spent from RADP during the same period of FY24.
This is the lowest ADP implementation for any fiscal year up to this point, based on IMED records available since FY2011-12.
For FY25, the government had allocated Tk2,26,164.95 crore in the RADP, including funds from its own sources.
Following the National Economic Council (NEC) meeting yesterday, Planning Adviser Wahiduddin Mahmud said budget implementation in the current fiscal year would be lower than in previous years due to a transitional government following political changes, which reviewed and trimmed many development projects.
Several projects from the previous government were revised, and others were delayed due to contractors backing out, he said.
According to officials, a trend has emerged in Bangladesh where ADP funds are hurriedly spent towards the end of the fiscal year. This rush often results in waste and corruption in public spending.
Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), stated that unlike elected governments, an interim government should not rush to spend development funds at the end of the year.
In response to a question about end-of-year spending, Wahiduddin said that the finance ministry believes releasing large amounts of funds early in the year increases the risk of wastage. Therefore, the ministry disburses funds gradually throughout the year.
He also noted that seasonal issues can often hinder project implementation. For instance, if monsoon rains begin while funds are still being disbursed, many projects become difficult to implement. Thus, the government plans its disbursements considering seasonal factors.
According to IMED data, Tk51,273 crore was spent from government funds in the first 10 months of the fiscal year — 38% of the total allocation. In the same period last year, Tk70,908 crore was spent, which was 44% of the government fund allocation.
During the same period, Tk35,559 crore (43.9%) was spent from foreign aid funds, compared to Tk48,468 crore (58%) in the previous year.
Additionally, Tk6,593 crore was spent from organisations' own funds during the first 10 months of the fiscal year.
The government allocated the highest ADP funds to 15 ministries and divisions, which together received 74.48% of the total ADP allocation. The overall ADP implementation largely depends on these ministries and divisions.
Among them, several have very low implementation rates. For example, the Health Services Division has spent only 14.90% of its allocation.
Officials said that the health sector generally struggles with fund utilisation due to limited capacity. Moreover, the Fifth Health, Nutrition, and Population Programme — a five-year plan that was scheduled to begin in July — has still not been approved, which has further stalled ADP spending in the health sector.
Among the other highest-funded ministries/divisions, the Bridge Division spent 29.96%, the Ministry of Shipping implemented 29.83%, the Ministry of Railways spent 33.27%, the Ministry of Civil Aviation and Tourism spent 39%.
On the other hand, the Energy Division spent 85.85% of its allocation.
Other notable spenders include Power Division at 61.97%, Ministry of Agriculture 62.46%, Local Government Division 54.32%, Secondary and Higher Education Division 50.66%, Ministry of Water Resources: 49%, Ministry of Housing and Public Works 48%, Roads and Highways Division: 46.31%.
