ADP spending hits 12-year low in Jul-Aug

The implementation rate of the annual development programme (ADP) in the July-August period of the current fiscal year was the lowest in the past 12 years due to cautious spending by the government and work disruptions amidst political turmoil.
The government allocated Tk 278,288 crore for the ADP this fiscal year, up 9.6 percent from last fiscal’s revised budget of Tk 254,000 crore.
According to data from the Implementation Monitoring and Evaluation Division (IMED), the implementation rate stood at just 2.57 percent in the two months, whereas it was 3.84 percent during the corresponding period of the last fiscal year.
Surprisingly, the implementation rate stood at 4.48 percent during the same period even amidst the pandemic.
Data shows that implementing agencies spent Tk 7,143 crore in the first two months of the current fiscal year, whereas they had spent Tk 10,542 crore during the same period in the last fiscal year.
IMED officials said all projects under the ADP had been halted as contractors fled following the ouster of the Sheikh Hasina-led Awami League government on August 5.
Moreover, out of the 56 ministries and divisions, the land and foreign affairs ministries, law and justice division and parliament secretariat could not spend a single paisa.
An additional 18 ministries and divisions spent less than one percent of their allocations.
Among the 15 ministries and divisions that received the largest allocations, the Power Division spent 5.6 percent of its total allocation followed by the Local Government Division with 4.6 percent.
The Ministry of Civil Aviation and Tourism spent 3.8 percent while the Ministry of Primary and Mass Education managed 3.2 percent.
“This time, a lack of resources and disruption in activities due to political unrest slowed the implementation rate,” said Towfiqul Islam Khan, senior research fellow at the Centre for Policy Dialogue (CPD).
The interim government should scrutinise projects that are at the preliminary stages and revise them if needed, he added.
“We know that project costs tend to be inflated. This should be stopped and projects that were previously undertaken should be examined,” Khan said.
“The government should also prioritise the implementation of foreign-funded projects amid financing shortages.”
Ashikur Rahman, a senior economist at the Policy Research Institute of Bangladesh, said political uncertainties and instability in July and August and the lukewarm response of the bureaucracy to different policy prescriptions of the interim government had slowed the ADP implementation rate.
“This should, however, improve if political stability and law and order is restored and public bodies become more decisive,” he said.