ADP implementation falls to historic low of 41.31% in first 10 months of FY25

With just a month and 10 days left in the current fiscal year, the government has yet to utilise even half of the Annual Development Programme (ADP) allocation.

During the first 10 months of FY25, ministries, divisions and departments have managed to spend only 41.31% of their allocated ADP funds.

This, according to a report published yesterday by the Implementation Monitoring and Evaluation Division (IMED), is the lowest ADP implementation rate in recent history.

In comparison, ADP implementation stood at 49.26% in the same period of the previous fiscal year and 50.33% in FY23.

The government spent Tk93,424.83 crore from the revised ADP in the July-April period of FY25, which is Tk31,890.85 crore less than in the same period last fiscal, when Tk107,612.45 crore was spent. 

This is the lowest 10-month ADP expenditure since at least FY12, the earliest year for which data is available on IMED's website.

Earlier in March this year, the interim government approved a revised ADP of Tk2,26,164.95 crore for the current fiscal year, including funds from the implementing agencies' own resources.

Following Sunday's National Economic Council (NEC) meeting, Planning Adviser Wahiduddin Mahmud stated that budget implementation in the current fiscal year will be lower than in previous years.

Explaining the shortfall, he attributed the slowdown to the political transition – the fall of the previous government in August last year – after which the interim government thoroughly reviewed and scrutinised development projects. 

Many projects were downsized, and several initiated under the previous administration were revised. In addition, implementation was disrupted in several cases due to contractors pulling out of projects, Wahiduddin added.

"The political situation this year has not been stable. Administrative uncertainty continues. That has affected development spending," said Dr Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM). 

"Moreover, in our country, there is a tendency to rush spending towards the end of the fiscal year, which often leads to waste and corruption," he said. 

However, he cautioned that, unlike during the tenure of elected governments, the interim government should avoid hurried spending in the final months.

In response to a question about the tendency to rush development spending, Wahiduddin Mahmud said the finance ministry believes that releasing large sums at the beginning of the year increases the risk of misuse. "So, the Finance Division disburses funds gradually throughout the fiscal year to avoid waste."

He also pointed out that seasonal factors often hamper project implementation. "If funds are released late and the monsoon sets in, executing many infrastructure projects becomes difficult," he said. 

For this reason, the government is now planning fund disbursements with seasonal considerations in mind, he added.

ADP spending so far

According to IMED, from government funds alone, Tk51,273 crore has been spent so far – 38% of the total allocation. In the same period last year, the spending stood at Tk70,908 crore, which was 44% of the allocation.

Expenditure from foreign aid during the period amounted to Tk35,559 crore, or 43.9% of the allocation – down from Tk48,468 crore or 58% in the previous year. Meanwhile, implementing agencies used Tk6,593 crore from their own funds during the same period.

The government allocated 74.475% of this year's ADP to just 15 key ministries and divisions. Their performance is crucial to overall ADP execution, but several of these high-priority entities have reported alarmingly low spending rates.

For instance, the Health Services Division, which received a significant allocation, spent only 14.9% of its funds. 

Officials say low implementation in the health sector is primarily due to institutional capacity constraints. On top of that, the fifth Health, Nutrition and Population Programme (HNPP), a five-year flagship initiative, has yet to receive approval, even though it was scheduled to roll out in July last year. As a result, a significant portion of the ADP allocation for the health sector remains unutilised.

Among the top recipient ministries and divisions, the Bridge Division has spent only 29.96% of its allocation, while the Ministry of Shipping has implemented 29.83% of its ADP allocation so far. In addition, the Ministry of Railways has implemented 33.27%, while the Ministry of Civil Aviation and Tourism has achieved an implementation rate of 39%.

The Energy Division has shown the strongest performance, spending 85.85% of its allocation in the first nine months of the fiscal year. 

The Power Division has implemented 61.97% of its ADP, while the Ministry of Agriculture utilized 62.46%. The Local Government Division spent 54.32%, the Secondary and Higher Education Division 50.66%, the Ministry of Water Resources 49%, the Ministry of Housing and Public Works 48%, and the Road Transport and Highways Division implemented 46.31% of their respective allocations during the same period.