Record low 27% ADP implementation in Jul-Jan
Officials say slow economy, dollar shortages, and high construction costs have led to reduced enthusiasm for expenditure
The Annual Development Programme (ADP) registered a record low 27.11% implementation in the first seven months of the current fiscal year, owing to economic slowdown and the national election held during the period.
The implementing agencies managed to spend Tk74,464 crore during the July-January period of FY24 against the Tk2.75 lakh crore ADP allocation, according to the latest report from the Implementation Monitoring and Evaluation Department (IMED), released yesterday.
Even in the previous fiscal year, characterised by government austerity measures and project freezes, the implementation rate during July-January was marginally higher at 28.16%.
Abul Kashem Md Mohiuddin, secretary of the IMED, said that due to the current economic conditions, the government is prioritising funds. "The finance division is focusing on releasing funds for less critical or slower-paced projects, while important projects that directly benefit people and drive economic development are not exempted."
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The IMED secretary said the speed of money disbursement and implementation rate will increase during the rest of the year.
However, Planning Commission officials said that not only is the allocation decreasing, but ministries and divisions are also spending funds slowly. Economic conditions, dollar shortages, and high construction costs have led to reduced enthusiasm for expenditure.
The original ADP allocation for the current fiscal was Tk2.63 lakh crore, of which Tk1.69 lakh crore was allocated from public funds and Tk94,000 crore from foreign sources. The total size of the ADP is Tk2.75 lakh crore, including self-financing by the implementing ministries and divisions.
Meanwhile, the revised ADP allocation for the current fiscal proposes Tk2.45 lakh crore. Of this, government funds are Tk1.62 lakh crore and the foreign aid component is Tk83,500 crore.
Last month, Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, said ADP implementation was marked by significant challenges, including financial difficulties due to reduced tax revenue and high inflation.
He also noted that the elections slowed down work in the field, causing uncertainty among contractors and a drop in ADP implementation.
Mujeri recommended prioritising fully prepared development projects essential for the current situation and suggested training officials to enhance implementation capacity.
Implementation by sectors, agencies
IMED data show that government agencies spent only 25.35% of allocated state funds in the first seven months of FY24, notably lower than the usual rate. The rate was 26.38% in the same period last year.
Foreign fund expenditure was 30.20% in the same period this year, compared to 31.20% last year.
Of the 58 ministries and divisions, 24 spent less than 25% of public funds, including notable ones like the Ministry of Shipping and Ministry of Industry. Similarly, 18 ministries spent less than 30% of foreign aid, with the Ministry of Housing and Public Works among them.
Additionally, 15 ministries allocated 79.83% of the total ADP, but many struggled to speed up implementation, such as the Secondary and Higher Education Division, which only spent 12.32% of its allocation in seven months.
