Project spending drops to record 28% in 7 months on austerity, cost hike
The previous lowest rate of ADP implementation in the July-January period was recorded at 28.45% in FY21
Annual Development Programme (ADP) implementation registered a record low of 28.16% progress in the first seven months of FY23, according to available data, with the implementation rate of some of the ministries and divisions that have the highest allocations being among the lowest.
The previous lowest rate of ADP implementation in the July-January period was recorded at 28.45% in FY21.
Among the 15 ministries and divisions that have got some 83% of the total ADP allocation for this fiscal year, four ministers and divisions - Health Service Division, the Ministry of Primary and Mass Education, the Secondary and Higher Education Division, the Ministry of Shipping spent below 16% in the July-January of FY23.
Seven ministries and divisions – the Local Government Division, Road Transport and Highways Division, Power Division, Bridges Division, Ministry of Housing and Public Works, Agriculture Ministry and Prime Minister's Office – logged over 30% progress in the July-January period of this fiscal year, according to the latest progress report prepared by the Implementation Monitoring and Evaluation Division (IMED).
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In the current economic situation, work on many projects has been halted due to the increase in the cost of construction materials.
Besides, government austerity in project spending in view of the present economic situation limiting fund spending on some projects has also limited the ADP implementation rate, said officials of the IMED of the planning ministry.
IMED officials said that although the government has devised various strategies to implement the ADP, the ministries and divisions are yet to develop their implementation capacity.
From complexities in tendering, land acquisition, and foreign fund sourcing to delays in administrative approval and appointment of project directors, lack of proper feasibility studies, lack of coordination among the implementing agencies in the field – all have got in the way of ADP implementation, said IMED officials.
As it will not be possible to spend the money, the Planning Commission has initially decided the size of the revised Annual Development Programme (ADP) for the current fiscal year by reducing the allocation by 7.51%, or Tk18,500 crore.
The size will be finalised at the National Economic Council meeting scheduled to be held 1 March with Prime Minister Sheikh Hasina in the chair.
According to IMED data, 31 ministries and divisions could not spend even 25% of the allocated government funds in the first seven months of the fiscal year.
Notable among these agencies are the Rural Development and Co-operatives Division, the Ministry of Science and Technology, the Health Service Division, the Ministry of Primary and Mass Education, the Secondary and Higher Education Division, the Ministry of Energy and Mineral Resources and the Ministry of Food.
The government has divided various projects into A, B, and C categories considering their importance to tackle the economic crises. The less important projects have been put into the C category, and fund release for them has been halted temporarily, said Planning Ministry officials.
There is a provision to release 75% of the fund for the B-category projects while for the A-category ones, 100% of the allocated fund can be released.
Considering the current economic situation, the government has attached importance to the utilisation of foreign aid. All foreign aid-funded projects are kept in the A category. Even then, 18 ministries and divisions saw a 20% drop in foreign aid spending in the first seven months of the fiscal year.
Notable among them are the Health Service Division, Ministry of shipping, Ministry of Expatriates' Welfare and Overseas Employment, Secondary and Higher Education Division, Ministry of Water Resources, the Ministry of Civil Aviation and Tourism, the Ministry of Primary and Mass Education, the Ministry of Housing and the Ministry of Food.
