Major climbdown in revised ADP likely eliminating ‘politically-motivated’ projects

AL had passed whopping Tk 265,000cr ADP for 2024-25 fiscal

The development budget for the running 2024-25 fiscal, which was taken by the Awami League government, is likely to witness a major shrink as the interim government has axed a good number of projects.

The interim government that came into power on August 8 following the student-people uprising has decided to cut short many development projects terming those as the politically motivated ones.

According to the Planning Ministry sources, the ECNEC in its meetings came to a decision that many development projects which were taken by the Awami League government did not seem to bring good results as per the expenditure.

“The development budget would be smaller compared to the previous years,” Planning Adviser Dr Wahiduddin Mahmud recently told in a media briefing after the ECNEC meeting.

The four months of the running fiscal saw a record low of 8 per cent implementation of the development budget, this low implementation rate is also applicable for foreign-funded projects.

As per the information from the Planning Commission, the rate is 12-13 per cent for those government entities which implement projects from their own funding.

The implementation pace of the government’s development programmes has remained sluggish, with the Annual Development Programme (ADP) showing one of its lowest execution rates in the past five years.

During the first four months of the current fiscal year, from July to October, the ADP implementation rate stood at only around 8%, the lowest figure in recent years, according to the Implementation Monitoring and Evaluation Division (IMED) of the Planning Ministry.

Its data highlights that, in contrast, the same period last year saw an execution rate of 11.54%. Specifically, for the period from July to October of the current fiscal year, the government managed to implement development projects worth Tk 21,978 crore, according to the IMED.

Professor Muhammad Yunus led the interim government in its first Ecnec meeting had decided to reduce the development budget.

Dr Wahiduddin Mahmud mentioned that many of the taken projects were politically motivated and those will not bring good results compared to the expenditures.

“To us, it did not seem that those will bring any good result, we have axed those, generally the revised development budget shrinks to some extent, this time the ratio will be higher,” he said.

He also said that in previous times after the Ecnec nod of any project, the concerned ministry used to become free from their responsibilities.

“But this time the implementation level to ensure corruption-free and irregularities free the concerned ministries will be responsible,” he added.

Due to this, there have been amendments to the running projects, even in the foreign-funded projects after consulting with them.

“There is some conditions from the lenders while they provide loans, the amendments are done after convincing them,” the Planning Adviser said.

Planning Ministry sources said that the slow pace of the project implementation has occurred as many running project directors have fled away. As a result, the government has faced severe problems to continue the projects.

“The ministries are not reached in a stable position, so preparing new project and give proper in that preparation…” Dr Wahiduddin Mahmud told in the ECNEC briefing.

Planning Commission sources mentioned that the interim government is putting emphasis on innovative and new types of projects keeping aside the old-fashioned politically motivated ones.

The Planning Adviser has already asked concerned officials to prepare projects after deep thinking and make sure that the particular project would bring multiple positive results against its expenditure, the sources said.

They said that preparing new types and innovative projects is a time-consuming matter.

The National Economic Council (NEC) of the Awami League government approved the Annual Development Programme (ADP) for the fiscal year of 2024-2025 with an outlay of Tk 265,000 crores.

The transport and communication sector got the highest allocation of Tk 70, 687.75 crore (26.67pc of allocation) in the ADP.

Besides, the NEC approved some Tk 13,288.91-crore ADP of the autonomous bodies or corporations.

Among the Tk 265,000 crores, Tk 165,000 crore will be financed from domestic sources, while the rest Tk 100,000 crore from foreign sources.

In the new ADP, the total number of projects is 1,321 including 1,133 investment projects, 21 survey projects, 87 technical assistance projects and 80 projects from the autonomous bodies and corporations.

Out of the Tk 13,288.91-crore ADP of the autonomous bodies or corporations, Tk 11,698.96 crore will be mobilized from internal resources, while the remaining Tk 1,589.95 crore from foreign sources

So, with the 13,288.91 crore ADP for autonomous bodies or corporations, the total size of ADP for 2024-2025 has stood at Tk 278,288.91 crore.

Among the top 10 sectors in terms of allocation, the power and energy sector received the 2nd highest allocation of around Tk 40,752 crore (15.38pc) followed by the education sector with Tk 31,529 crore (11.36pc), housing community facilities with Tk 24,868 crore (9.38pc), health sector with Tk 20,683 crore (7.80pc), local government and rural development with Tk 17,986 crore (6.79pc), agriculture sector with Tk 13,220 crore (4.99pc), environment, climate change and water resources with Tk 11,089 crore (4.18pc), industry and economic services with Tk 6,492 crore (2.45pc) and science and information technology sector with Tk 4,786 crore (1.25pc).

The total allocation against the top 10 sectors is some Tk 242,093 crore (90.25pc of the total ADP)

According to the new ADP for FY25, the highest 10 allocation recipient ministries and divisions are Local Government Division with some Tk 38,809 crore (15pc of allocation), Road Transport and Highways Division with Tk 32,042 crore (12.39pc), Power Division with Tk 29,177 crore (11.28pc), Primary and Mass Education Ministry with Tk 16,136 crore (6.24pc), Health Services Division with Tk 13,741 crore (5.31pc ), Railways Ministry with Tk 13,726 crore (5.31pc), Science and Technology Ministry with Tk 12,887 crore (4.98pc), Secondary and Higher Education Division with Tk 11,388 crore (4.40pc), Shipping Ministry with Tk 10,373 crore (4.01pc) and Water Resources Ministry with Tk 8, 687 crore (3.36pc).

The total allocation against the 10 ministries or divisions is around Tk 186,965 crore, which is some 72 per cent of the overall ADP outlay.

— UNB.