6pc ADP cut likely
The government might slash the Annual Development Programme (ADP) by 6 percent or Tk 2,000 crore as most ministries have failed to spend their budget allocations.
In the current fiscal year the government took up an ambitious ADP of Tk 30,500 crore. Now it will come down to Tk 28,500 crore.
A meeting of the fiscal coordination council on Sunday with Finance Minister AMA Muhith in the chair reviewed the total status of financial resources of the budget and the resources yet to be tapped.
After reviewing the implementation status it suggested trimming down the ADP.
The planning ministry is now working on the revised ADP and will place it at the meeting of the National Economic Council (NEC) very soon.
According to preliminary information of the planning ministry, during the six months from July to December only 28 percent of the ADP allocation has been spent.
If the government wants to implement the full ADP it will have to spend the remaining 72 percent in the next six months, which the planning ministry officials think is “absurd”.
Of the total ADP 10 large ministries got 76 percent allocation. In the first six months of the current fiscal year the communications ministry could spend only 16 percent, power division 22 percent, health and family welfare ministry 27 percent, water resources ministry 18 percent, housing and public works ministry 4 percent, education ministry 33 percent, agriculture ministry 34 percent, primary and mass education ministry 39 percent and local government division 39 percent.
Only the energy division could spend 74 percent though its allocation was very small compared to the ministries.
Generally every fiscal year the government takes up a large ADP and at the end of the year it is cut down. Finally the government fails to implement the revised ADP.
Over Tk 20,000 crore ADP has never been implemented. Despite that the new government, in a bid to increase public investment, took up a big-size ADP this time.
An official who was present at the meeting said this time the ADP is not being slashed for shortage of resources.
He said, “Our revenue and foreign aid are still satisfactory. This year the national revenue growth target was around 16 percent. In six months till December 17 percent of the growth target has been achieved.”
From July to October the foreign aid showed a negative trend and only $ 364 million foreign aid was received but at the end of five months in November it crossed $ 1 billion.
The planning minister has already discussed with the secretaries of different ministries early this month and said if any allocated fund is not spent fully against the projects under ADP, it will be done by June 2010.
Centre for Policy Dialogue (CPD) yesterday released a report on the State of the Bangladesh Economy in FY 2009-10.
CPD in its report on ADP utilisation said, “In recent times, launching of a project itself has become a challenge along with the challenge of maintaining the timeline of implementation. The government is expected to make a mid-term revision of ADP allocation in this month which is a welcome decision.”
“It is hoped that this exercise is considered as not only the monetary utilisation of the projects but it will also put the aspects of quality of ADP utilisation under scrutiny,” it stated.
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