ADP spending drops by Tk9,300cr YoY in 7 months

In the first seven months (July-January) of the current fiscal year, only Tk50,556.29 crore has been spent under the Annual Development Programme (ADP) – the lowest expenditure in the past nine fiscal years.

Even in FY2024-25, despite the student-led uprising, the fall of a government, and administrative instability, ministries and divisions spent more during the same period at Tk59,876.87 crore, which is Tk9,320.58 crore higher than the current year's spending over the same timeframe.

Previously, in FY2016-17, ADP spending during this period was Tk39,973 crore.

These figures were revealed in a report published Monday by the Implementation Monitoring and Evaluation Division (IMED).

Lowest implementation rate

In terms of allocation, the ADP implementation rate for July-January of the current fiscal year stands at just 21.18%. According to data available on IMED's website for the same period in previous years, this is the lowest implementation rate on record.

In the previous fiscal year, the rate was 21.52%. In FY24 and FY23, implementation rates during the first seven months were 27.11% and 28.16%, respectively.

Including funding from autonomous bodies, a total allocation of Tk2,38,695.64 crore was made under the ADP for the current fiscal year.

Structural reasons behind slow implementation

Planning Adviser Dr Wahiduddin Mahmud recently said several structural factors are responsible for the decline in ADP implementation. Following last year's change in government, many project directors were unavailable; some stepped down due to corruption allegations, and appointing new directors took time. Additionally, many projects had to be revised, delaying the resumption of activities.

He also noted that due to the recently approved public procurement policy, many ministries and divisions took additional time to initiate tender processes. These factors slowed project implementation and reduced demand for allocations in the revised ADP.

The Planning Adviser added that the interim government has imposed conditions on approving new projects. Periodic progress and quality reports are now mandatory, and large construction projects must undergo mid-term evaluations by independent experts.

While these measures may slow implementation somewhat, they aim to ensure better outcomes. In many cases, restructuring Development Project Proposals (DPPs) has reduced project costs by Tk1,000-4,000 crore without affecting effectiveness.

In some cases, a deliberate "go-slow" approach has been adopted. For projects such as Payra Port and the metro rail, the government believes it is reasonable to proceed in phases after evaluating performance and experience. The Planning Adviser also cited recent political instability as a factor behind the lower implementation rate and reduced ADP demand.

Experts expect limited improvement

Experts fear that the ADP implementation rate may not increase significantly this fiscal year.

Dr Mustafa K Mujeri, former Director General of the Bangladesh Institute of Development Studies (BIDS), said that after a new government takes office, it is natural to reassess the pace and priorities of development projects. The projects included in the ADP were taken under the policy priorities of the previous government. Therefore, it is both natural and reasonable for the new government to review them in light of its own development vision and priorities.

Through this review, projects inconsistent with the current context or new policy goals may be cancelled or revised. At the same time, new priority projects – such as canal re-excavation or water management initiatives – may be incorporated into the ADP. As a result, both removal of some projects and inclusion of new ones are likely.

"However, completing this process will take time. Nearly seven months of the fiscal year have already passed, and with Ramadan and other practical constraints ahead, the likelihood of a significant acceleration in implementation during the remaining months is low. The implementation rate is currently around 21%; while it may increase somewhat by year-end, a major surge is unlikely," he said.

He further noted that increasing expenditure hastily just to raise the implementation rate would not be justified. If the new government takes time to thoroughly review ADP projects – dropping unnecessary or low-priority ones while prioritising essential projects – then even if the implementation rate remains temporarily low, it would be a more effective and economically rational long-term decision.

Breakdown of spending

According to the IMED report, Tk28,052 crore – 19.48% of allocation – was spent in the first seven months from the government's own funds. In the same period last year, Tk30,096 crore (18.24%) was spent.

Under foreign loans and grants, Tk18,668 crore was spent – 21.71% of allocation. In the same period last year, Tk24,961 crore (24.96%) was spent.

From organisations' own financing, Tk3,837 crore was spent in the first seven months, compared to Tk4,819 crore in the same period last year.

Performance of major ministries

Fifteen ministries and divisions received 74.56% of the total ADP allocation this fiscal year. Overall ADP implementation largely depends on their performance.

Among the highest allocated ministries and divisions are Health Education and Family Welfare Division: 2.98% implementation, Health Services Division: 6.59%, Ministry of Railways: 12.45%, Road Transport and Highways Division: 13.91%, Secondary and Higher Education Division: 16.36%, Power Division: 23.99%, Ministry of Primary and Mass Education: 23.02%, Ministry of Shipping: 23.04%, Bridges Division: 23.73%, Ministry of Housing and Public Works: 26%, Ministry of Agriculture: 26.40%.

Among the top allocated ministries, the Ministry of Water Resources recorded the highest implementation rate at 41.10%, followed by the Energy and Mineral Resources Division at 40.66%. The Local Government Division achieved 36.91%, and the Ministry of Science and Technology implemented 36.90% of its ADP allocation.