Development spending rising

Development spending in Bangladesh rose 17 per cent year-on-year in the first seven months of the current fiscal year, highlighting the momentum in the economic recovery from the pandemic-induced slowdown.

Though the second wave of Covid-19 hit the country during the second quarter of 2021 prompting the government to impose a countrywide lockdown, the situation started improving from the beginning of the current fiscal year leading to the quick resumption of economic activities.

As a result, the government managed to spend Tk 71,532 crore from its ADP budget in the July to January period, which was Tk 61,048 crore in the same period a year ago, according to data from the Implementation Monitoring and Evaluation Division (IMED) under the planning ministry.

As of January, the ministries and divisions spent 30.21 per cent of the total ADP allocation of Tk 236,793 crore set aside to carry out development activities during the current fiscal year, against 28.45 per cent spent in the same period in FY21.

Planning Minister MA Mannan told reporters on Tuesday that ADP implementation has seen an increase by 2 percentage points so far in the current fiscal year compared to the previous fiscal year.

"ADP implementation has increased in the country at a time when the rest of the world is struggling," he said.

Although the implementation marked a rise, the spending is still below the pre-pandemic stage. In the first seven months of FY20, the period before the pandemic, the ministries and divisions were able to spend 32.07 per cent of the development budget.

The average monthly ADP spending in the seven months of FY22 has been Tk 10,218 crore. This means ministries and divisions will have to expend more than Tk 33,000 crore on average in each of the five remaining months to hit the ADP target, a goal that an official of the planning ministry says will be impossible to hit.

So, the government is planning to slash the target in the revised ADP next month, he said.

According to the monthly progress report of the IMED, the implementation of both government funds and project assistance increased.

In the seven-month period, the implementing entities managed to spend 31.27 per cent of the government funds, versus 29.22 per cent registered in the same period in the last fiscal year.

The implementation of the project assistance was 28.75 per cent in the July-January period, compared to 28.39 per cent a year ago.

Despite ongoing health crisis, the health services division has been one of the worst-performing divisions as it could spend Tk 1,713 crore from July to January, which accounted for only 13.18 per cent of the total allocation of Tk 13,000 crore.

Other low-performers include the shipping ministry, which achieved 14.46 per cent of the spending target.

The bridges division implemented 19.91 per cent of the budget and the Prime Minister's Office 21.93 per cent of the allocation.  Of the 15 largest recipients, the industries ministry was the top performer in the first seven months as it implemented 62.75 per cent of its allocation.

The housing and public works ministry spent 39.84 per cent of the allocation, the local government division 36.50 per cent, the railway ministry 36.10 per cent and the water resources ministry 34.48 per cent.