10 ministries brace for budget cuts

The allocation for the top 10 ministries and divisions is set to be trimmed by 13 percent in next fiscal year's annual development programme (ADP) due to the government's cost-cutting measures and shying away from mega and low-priority projects.

In the budget for next fiscal year, Tk 163,103 crore would be earmarked for the ministries, which is about 70 percent of the total ADP allocation, The Daily Star has learnt from planning ministry officials involved with the proceedings.

Among the top 10 ministries and divisions, eight are getting fewer allocations than this year, but two are getting more resources: the secondary and higher education division and the road transport and highway division.

The railway ministry, the power division, and the primary and mass education ministry will see the biggest chop.

The railway ministry's allocation would almost be halved to Tk 7,715 crore in fiscal 2025-26 as foreign funds have dried up for the sector. Of the total allocated amount, Tk 3,258 crore would be foreign funds.

Most of the railway mega projects have already been completed and the projects under Indian line of credits (LOC) are progressing at a snail's pace.

Besides, no mega projects would be initiated by the interim government, which resulted in major cuts in the railway ministry.

The power division's allocation would be downsized 30.5 percent to Tk 20,284 crore, which is the third highest allocation in the upcoming fiscal year's ADP.

Although the local government division is getting less allocation than this year, it is still getting the top share: Tk 36,099 crore.

The local government is not functioning in many places but it is still getting preference as the interim government is looking to increase temporary employment in rural areas, officials said.

The road transport and highway division, which has several ongoing projects, is getting the second-highest allocation: Tk 32,330 crore. This year, the division got Tk 32,043 crore.

The allocation for the primary and mass education ministry will be downsized to Tk 11,399 crore from Tk 16,136 crore but the secondary and higher education division will get Tk 2,000 crore more than this fiscal year. The division is likely to get Tk 13,625 crore in fiscal 2015-26.

The health services division, which spends around half of the health sector allocation, is expected to get Tk 11,618 crore -- Tk 2,000 crore less than this fiscal year.

The science and technology ministry's allocation is likely to be trimmed by about 5.7 percent to Tk 12,155 crore. Of the allocation, a big portion is kept for the Rooppur nuclear power plant, whose first unit is expected to start commercial operation in the upcoming fiscal year.

The total ADP for fiscal 2025-26 is likely to be Tk 230,000 crore, up 6.5 percent from this year's revised ADP.

Of the total allocation, Tk 144,000 crore would come from domestic resources, down 12.7 percent year-on-year. About Tk 86,000 crore would be foreign funds, down 14 percent year-on-year.

Besides, the allocation for the state-owned enterprises would be Tk 8,000 crore, which is nearly half their original allocation this fiscal year.

In the first nine months of this fiscal year, ADP implementation stood at just 36.65 percent, the lowest in at least 15 years.

The proposed ADP will be finalised today at the meeting of the National Economic Council.

The non-development allocations would be finalised later and the budget would be announced on June 2.