ADP spending plunges 48pc
Development spending nosedived 48.22 per cent in April and May in the current fiscal year, highlighting how the pandemic-induced shutdown brought the country's economic and development activities to a screeching halt.
The government managed to spend Tk 24,717 crore in April and May together, down from Tk 36,635 crore during the same period a year ago.
April was the first full month that witnessed the impact of the countrywide lockdown the government was compelled to put in place to stop the spread of the raging coronavirus pandemic. The deceleration in development activities continued into May.
Last month, the expenditure under the Annual Development Programme (ADP) fell 38.79 per cent to Tk 16,581 crore from Tk 23,012 crore in May in FY18-19 as the shutdown continued.
The government implemented development works involving Tk 115,421 crore in the first 11 months of the current fiscal year, which was Tk 120,043 crore during the same time a year ago, or down 3.85 per cent year-on-year.
The ADP implementation rate was 57.37 per cent in the July-May period, against 67.97 per cent during the same period in FY19, said Planning Minister MA Mannan at the meeting of the Executive Committee of the National Economic Council in Dhaka yesterday.
"We all know that the ADP implementation is lower because of the global coronavirus pandemic."
In April, ADP spending was Tk 8,136 crore, which was Tk 13,623 crore in the same month in FY19.
The development spending may end the current fiscal year in a dismal state because of massive fall in activities across the country despite partial reopening of the economy from June.
In fact, the slowing trend of development spending will continue into FY21 as the government diverts funds to meet the immediate needs to prop up the economy caving under the burden of the global pandemic.
It is also uncertain when the pandemic would peter out as the cases of coronavirus infections in Bangladesh are on the rise.
The ADP for next fiscal year is Tk 205,145 crore, up only 6.33 per cent from this year's revised development budget.
At least 2 per cent of GDP may be lost in revenue income in this fiscal year and this prompted the government to focus on priority projects.
Health, agriculture and employment creation have given priority while allocating resources for the ADP.
The government has also unveiled a social protection and economic stimulus package amounting to Tk 103,117 crore, which is equivalent to 3.7 per cent of the gross domestic product and the highest in South Asia in terms of GDP.
Critical element will be utilisation of foreign aid through faster-paced ADP project implementation with good governance, the Centre for Policy Dialogue said in a paper on Saturday.
There is no high ambition in financing ADP from foreign aid. Indeed, foreign aid expectation in terms of both allocation and number of projects decreased drastically in FY21, the think-tank said.
"Financing from revenue surplus is also on a declining trend."
The implementation of the mega projects, many of which are already behind schedule, would also be pushed back further because of the pandemic.
The construction of the Padma Multipurpose Bridge had 79.50 per cent overall progress as of May this year, data from the planning ministry showed.
The railway connecting to Padma Bridge had 24.43 per cent physical progress followed by Rooppur Nuclear Plant project 25.04 per cent financial progress, Rampal Thermal Power plant 48.93 per cent physical progress, Dhaka Mass Rapid Transit Development Project (Line-6) 44.76 per cent overall progress and the single track dual gauge railway line from Dohazari to Gundum near Myanmar 39 per cent physical progress.
The Maheshkhali-Matarbari Integrated Infrastructure Development Activities, which include 12 projects, had 33.32 per cent progress, while the construction of the first terminal and other infrastructure of the Payra Deep Sea Port progressed 0.82 per cent.