New ADP to get 22pc bigger
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The government may increase the size of its annual development programme for the next fiscal year by around 22 percent to Tk 80,000 crore, compared to the original allocation this year.
The Finance Division has set the preliminary outlay for the next fiscal year's budget which will be placed at a resource committee meeting tomorrow, a finance ministry official said.
The estimate will be finalised after further discussions in the next two months, he said.
In the current fiscal year, the ADP size was raised by about 19 percent to Tk 65,870 crore, over the previous year's actual allocation, but only 38 percent of the outlay was spent in the first eight months of the year.
The government has a plan to revise down this year's ADP size to Tk 55,000 crore which will be placed at the National Economic Council meeting on April 3. However, the revised allocation may finally rise a little at the meeting.
As a result, the volume of the next ADP is set to be 45 percent bigger than the revised one for this year.
However, the last fiscal year's actual implementation was not more than Tk 50,000 crore.
A planning ministry official said a big ADP is taken every year as ministers and lawmakers want to include their projects in the original outlay.
Economist Zahid Hussain said there is an incentive at the individual level to push new projects for inclusion in the ADP even when it is not necessarily justifiable on grounds of national interest.
He said: "It brings local glory besides opening opportunity for patronisation in the form of employment and works contracts."
These immediate gains sometimes lead to overlooking issues related to the propriety of technical design, management, and financing of new projects, he added.
This problem is not unique to Bangladesh. It is called "pork-barrel politics" in the United States, referring to public spending intended to benefit constituents of a politician in return for their political support either in the form of campaign contributions or votes, Hussain said. Political influence on public expenditure decisions is inescapable, he said.
The economist also said what is important is to make sure that good politics converges with good economics. Ideally, good economics requires paying close attention to nationally important transformative projects in the existing ADP portfolio.
Given the paucity of financial and human resources in the government, expansion of ADP should be based strictly on their economic rationale and the ability of the sponsoring ministries to implement the new projects, Hussain said.
The Finance Division has drafted a budget for the next fiscal year at around Tk 252,000 crore, which is around 18 percent more than the proposed revised budget for the current fiscal year.
The revenue earnings target could be set at Tk 184,890 crore for the upcoming fiscal year, the amount being 18 percent higher than the current year's target.
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