ADP spending may expand by 14pc

The government may allocate Tk 225,324 crore to implement development projects in the next fiscal year, which is 14 per cent higher than that in the revised budget.

The highest 27.39 per cent of the allocation under the annual development programme (ADP) has been proposed for the transport and communication sector.

The health sector, which is in the forefront of the coronavirus pandemic and has not been in good shape, was given the fifth-highest allocation, or 7.68 per cent of the ADP.

The size of the development budget was finalised at a planning ministry meeting chaired by Planning Minister MA Mannan yesterday. A report will be placed at a meeting of the National Economic Council on May 18 for approval.

The size of the original ADP was Tk 205,144 crore in the current fiscal year. The planning ministry proposed to slash it to Tk 1,97,643 crore in the revised budget as the pandemic has hamstrung the government's expenditure ability.

In the proposed ADP for the fiscal year of 2021-22, the size of foreign aid will be Tk 88,024 crore, up 39.72 per cent from the revised allocation of Tk 63,000 crore.

The government portion in the development programme will be Tk 137,299 crore, which is 1.97 per cent higher than in the current fiscal year.

Among the top sectors in terms of allocation, the transport and communication sector may get Tk 61,721 crore, followed by the power and energy sector (Tk 45,867 crore, or 20.36 per cent of ADP), the housing and community services sector (Tk 23,747 crore, or 10.54 per cent of the ADP), the education sector (Tk 23,177 crore, or 10.29 per cent of the ADP), and the health sector Tk 17,306 crore.

In its budget proposal last month, the Centre for Policy Dialogue said the national budget for FY2022 should take a two-pronged approach: faster implementation of the ADP projects by maintaining quality and standards; and enhancing the ability to spend more to implement essential projects. The budget allocation for health services division should be increased, it said.

Out of Tk 17,306 crore proposed for the health sector, the health services division may get about Tk 13,125.19 crore. The rest will go to other ministries and divisions that implement health-related development projects.

According to the finance ministry, the health sector is unable to utilise the ADP allocation properly.

The trend has continued in the current fiscal year as well, although the country has been facing the coronavirus pandemic for more than a year and needs to upgrade its healthcare system urgently. 

The health services division managed to spend only 21 per cent of the allocation from the ADP in the nine months to March, data from the Implementation, Monitoring and Evaluation Division of the planning ministry showed.

The division expended 10.31 per cent of the allocated project aid worth Tk 6,447.78 crore during the period.

The government allocated Tk 5,531.56 crore from its coffer to the division to implement various projects. It spent Tk 1,850 crore, which is 33.45 per cent of the allocation and one of the lowest among the ministries and divisions.

The local government and rural development sector may get Tk 14,274 crore in FY22 to execute development projects, the environment, climate change and water resources sector Tk 8,526 crore, the agriculture sector Tk 7,665 crore, the industry and economic service sector Tk 4,637 crore, and the science and information technology sector Tk 3,586 crore.

The government has proposed to set aside Tk 11,468 crore for the development projects of the state-owned enterprises. Of the sum, Tk 6,717 crore will be used from the fund of the agencies and the rest will come as project aid.