The interim government is poised to downsize the Annual Development Programme (ADP) by Tk50,000 crore for the 2024-25 fiscal year, as development activities suffered a severe setback following the mass uprising in July.
The ousted Awami League government had initially announced an ADP outlay of Tk2,78,288 crore, aiming to boost public expenditure and drive private investment for robust GDP growth.
However, during the July-November period, implementing agencies managed to spend only Tk34,214 crore, or 12.29% of the allocations. Ten ministries or divisions posted below 5% utilization, while two ministries reported zero progress, official data reveals.
Scrapping Politically Driven Projects
The Yunus-led interim government has signaled its intention to exclude politically motivated projects from the ADP. Foreign resource allocations are expected to see the largest cut in recent years, slashing Tk20,000 crore, while local resource allocations may be reduced by Tk30,000 crore.
This would mark a significant shift, as local share cuts have been uncommon in recent years. Currently, the ADP’s local resource allocation stands at Tk1,65,000 crore, with foreign project assistance (PA) accounting for Tk1,00,000 crore.
“The process of downsizing the ADP has begun. Ministries are submitting revised proposals, and a meeting will finalize the changes within a month,” said Abul Kashem Md. Mohiuddin, Secretary of the Implementation Monitoring and Evaluation Division (IMED).
Major Cuts to Large Projects
The revised ADP will prioritize minimal allocations for projects nearing completion and eliminate funding for several large, delayed projects. Tk11,186 crore is set to be cut from the Road Transport and Highways Division alone, with its original allocation of Tk32,082 crore expected to be reduced to Tk20,855 crore.
Many projects under this division have faced delays due to land acquisition issues and incomplete tendering processes.
Tk20,000 Crore Reduction in Foreign Aid
Political shifts and stricter scrutiny on foreign project loans have led to a decline in the number of ongoing projects. Sixteen ministries and divisions failed to utilize any of their foreign assistance allocations in the first five months of the fiscal year, prompting a likely reduction of Tk20,000 crore in PA allocations.
Historically, annual PA reductions averaged Tk8,000–10,000 crore, but this year, the figure is expected to double. Last fiscal year, Tk10,500 crore was trimmed from PA allocations.
Following these adjustments, the revised foreign aid allocation is expected to drop to Tk80,000 crore, with the Economic Relations Division (ERD) already holding meetings to finalize project-specific funding.
Poor Utilization by Key Ministries
Several ministries and divisions have failed to spend any of their allocations. The Ministry of Foreign Affairs and the Bangladesh National Parliament Secretariat spent none of their allocated funds in the first five months of the fiscal year. Similarly, the Health and Family Welfare Ministry and the Internal Resources Division utilized less than 1% of their allocated resources.
As the government tightens its focus on efficient resource utilization, the revised ADP is expected to reflect a significant reshuffle in priorities to ensure maximum development impact amidst fiscal constraints.
