ADP spending at 24.27% in eight months – lowest in a decade
Development expenditure during the July–February period decreased by Tk18,049 crore year-on-year
The government spent Tk67,553 crore on development in the first eight months of the fiscal year, just 24.27% of the allocation – the lowest implementation of the Annual Development Programme (ADP) in over a decade.
According to the Implementation Monitoring and Evaluation Division (IMED), development expenditure during the July–February period decreased by Tk18,049 crore year-on-year.
In the last fiscal year, ADP spending during the same period stood at Tk85,602.59 crore – which was 31.17% of the total allocation.
Keep updated, follow The Business Standard's Google news channel
No fiscal year has recorded ADP implementation at such a low level, with data available on the IMED website since FY12.
IMED officials said ADP spending stalled during the July uprising. The resultant instability in the administration has yet to normalise, hindering progress.
The government has reviewed all projects from the previous administration, dropping many initiated for political or irrelevant reasons, further impacting implementation.
Additionally, in the aftermath of the uprising, several project directors left, while others faced accusations, slowing ADP execution. Many domestic contractors have yet to return, while foreign contractors remain absent from several foreign-funded projects, further delaying implementation.
IMED officials attribute the decline in implementation to reduced government funding for many projects.
Economists note the ongoing instability since July, which has been keeping the situation unusual and slowing ADP implementation to its lowest in over a decade. With no clear timeline for improvement, limited time remains for ADP execution this fiscal year.
Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, argued that rushing spending in the last quarter, as done in previous fiscal years, would not be appropriate.
He told The Business Standard, "Due to the change of government, instability is affecting all areas, including administration and law and order. As a result, ADP implementation will naturally be lower."
However, a spending spree at the end of the fiscal year would lead to a waste of government funds and compromise quality. He emphasised stopping the practice of giving advance bills to contractors to inflate implementation figures and called for increased supervision to prevent corruption in hurried spending.
According to IMED data, spending from government funds in the first eight months was Tk34,858 crore, or 21% of the total allocation, compared to Tk49,804 crore, or 29.47%, in the same period in the last fiscal year.
Expenditure from foreign funds during this period was Tk 27,471 crore, or 27.47%, while last fiscal year's foreign fund expenditure stood at Tk21,105 crore, or 34%. Additionally, Tk 5,224 crore was spent from the funds of the implementing agencies.
The government has allocated 76.65% of the ADP for the current fiscal year to 15 ministries and divisions, whose implementation rate largely determines the ADP's overall progress.
Among the 15 ministries and divisions with the highest allocations, several have very low ADP implementation rates. The health education and family welfare divisions spent only 0.41% of their allocation, while the Health Division spent 5.48%.
Officials assert that due to limited capacity, spending in the health sector is not possible. Additionally, the fifth health, nutrition and population programme, intended for implementation since last July, has yet to be approved, further hindering ADP spending in the sector.
Among the top recipients of ADP allocations, the shipping ministry spent 14%, the secondary and higher education division spent 17.98%, the civil aviation and tourism ministry spent 18.35%, the Bridges Division spent 18.88%, the Road Transport and Highways Division spent 19.36%, the Railways Ministry spent 22%, the Primary and Mass Education Ministry spent 26.80%, and the Ministry of Agriculture spent 29.54%.
Only three ministries and divisions with the highest allocations have an implementation rate above 30%. The Water Resources ministry has implemented 36.96%, the Power Division 35.42%, and the Local Government Division 34.82%.
Additionally, the Science and Technology Ministry has implemented 36.55%, while the Power Division has implemented 33.64% of their ADPs in the first eight months.
