Development spending at decade low

Bangladesh's development expenditure was recorded at its lowest in a decade during the July-February period of the current fiscal year as government agencies were able to spend just 33.83 per cent of the allocation, according to the Implementation Monitoring and Evaluation Division (IMED).

The annual development programme (ADP) dropped 9.4 per cent to Tk 72,603.35 crore in the first eight months of fiscal 2020-21, down from Tk 80,143.06 crore in the previous fiscal.

This means the country's economy is still struggling to surge out fully of the pandemic-induced downturn.

The expenditure from the state coffer took a huge blow as it dropped 12.19 per cent to Tk 46,139 crore in the first eight months of the fiscal year.

Spending from foreign funds also declined marginally during the same period.

The government allocated Tk 214,611 crore to spend on development projects for fiscal 2020-21. However, the rate of spending on development projects in February suppressed that of pre-pandemic levels.

The projects spent 5.38 per cent of the total allocation for ADP in the budget in February, up from 5.19 per cent in the same month in a year ago, due to an increase in people's mobility that propelled economic activities.

"Many ministries typically lag behind in implementing the ADP, but since March last year, the implementation has been further reduced due to Covid-19," an official of the planning ministry told The Daily Star.

"But now the implementation is slowly increasing," he added.

Despite the pandemic, which pushed for further spending on the health sector around the world, the Health Service Division managed to spend only 21.38 per cent or Tk 20,830 crore of its total allocation from the ADP in the first eight months.

The Bridges Division is also lagging behind in ADP implementation as its expenditure stands at Tk 25.16 per cent in the eight months.

And for that, annual allocation for Padma bridge reduced to Tk 2,099.93 crore. The original allocation was Tk 5,000 crore.

The science and ICT ministry spent only 30.38 per cent in the same period. The allocation for the 2,400 MW Rooppur Nuclear Power Plant, the biggest single project which is worth Tk 113,092 crore, witnessed significant reduction.

The project would now get Tk 10,166.78 crore this fiscal, which is Tk 5,524.35 crore less than the original allocation.

The power plant project made 34.34 per cent progress until December last year.

Despite this sluggish spending in the government-funded project, the overall allocation to the revised annual development programme was trimmed by only Tk 7 lakh even though the government had decided to put low-priority projects on hold in the beginning of the fiscal year because of the coronavirus pandemic.

In the original ADP, the government fund was Tk 134,643.07 crore for fiscal 2020-21.

"We are now emphasising on government spending to boost the economy and increase funding in rural areas. That message has been conveyed to the ministries," said an official of finance ministry seeking anonymity.

"That is why a circular has been issued instructing them that they can spend up to 85 per cent of the low priority projects' allocation without the approval of the finance division," he added.

However, in the beginning of the financial year, priority projects were asked to halt their spending. Later, they were allowed to send 75 per cent of the allocations.