Development spending slows ahead of polls

Development spending dropped 10.91 percent in the first quarter of the fiscal year -- a rather puzzling development for an election year.

Typically, during an election year, development works are ramped up by the incumbent government to leave a favourable impression on the electorate.

But this time, spending under the annual development programme between the months of July and September was lower than a year earlier both in terms of percentage and volume.

In the first quarter of fiscal 2018-19, ADP spending was Tk 14,927 crore, which is the lowest in four years, according to statistics from the Implementation, Monitoring and Evaluation Division.

This means, the ADP implementation during the period was only 8.25 percent -- the lowest in three years.

The development is even more curious as the Executive Committee of the National Economic Council (Ecnec) has been on a project approval spree.

Last week two Ecnec meetings were held, where a total of 37 projects got a go-ahead. Normally, there is only one meeting a week.

After the Ecnec meeting on Thursday, Planning Minister AHM Mustafa Kamal said another 32 projects were awaiting approval.

On the slow ADP implementation, he said most of the projects are on roads, schools and madrasas, the construction materials for which were not available on time.

The private sector does not have any automated brick fields, so it does not make the required number of bricks showing the excuse of rain. “They wait for the rainy season to end to start making bricks,” he said, adding that he will advise the government to set up automated brick fields to produce bricks for public sector works.

Historical data shows ADP implementation is very low at the beginning of a fiscal year. To overcome the problem, the finance division in June issued an amended guideline empowering the project directors.

The guideline said the project directors can release the first and second quarter funds themselves instead of waiting for approval from the concerned ministries or divisions, an exercise that ate up two to three months.

Not only the finance ministry, Kamal also met with secretaries of different ministries and divisions in early August to inform them about the government's position on speeding up implementation of development projects in the election year.

The government has allocated Tk 180,869 crore development spending this fiscal year, up 17 percent from the previous year.

Of the Tk 14,927 crore spent in the first quarter, Tk 8,436 crore came from the government's own fund, which is 7.48 percent of the allotted sum.

Some Tk 5,188 crore came from foreign aid, which is 8.65 percent of the allocation of Tk 60,000 crore.

However, this time performance of state-owned enterprises improved: they spent Tk 1,303 crore in the first three months of the fiscal year, which is 16.55 percent of their allocation.