Record ADP Cuts in 50-Year History

Staff Reporter

The interim government has made a record cut in the Annual Development Programme (ADP), slashing allocations by Tk 49,000 crore. This is the largest reduction in allocations in the past 50 years, surpassing even the cuts made during the COVID-19 pandemic when the economy was stagnant. Economists attribute this massive reduction to the interim government’s inefficiency, strict measures, and the cyclical nature of old problems. Additionally, stricter environmental clearance requirements for construction projects have been introduced, which will now be enforced rigorously, according to officials.

On Monday, March 3, the National Economic Council (NEC) approved the revised ADP. The meeting, chaired by Chief Adviser and NEC Chairperson Dr. Mohammad Yunus, was held at the NEC conference room in Sher-e-Bangla Nagar. Planning Adviser Dr. Wahiduddin Mahmud briefed the media after the meeting.

This year, ADP implementation stands at 21.52% during this period, compared to 27.11% during the same period last fiscal year.

During the briefing, Dr. Wahiduddin Mahmud stated, “Allocating large funds without the capacity to spend them does not reflect well. Therefore, we want the ADP to remain smaller this fiscal year.” He also mentioned significant changes in the upcoming budget, emphasizing that allocations will not exceed revenue collection. Additionally, construction projects will now require strict environmental clearance from the Department of Environment.

The revised ADP allocates Tk 2.16 lakh crore, down from the original allocation of Tk 2.65 lakh crore (excluding autonomous institutions). Of this, Tk 1.35 lakh crore will come from government funds, and Tk 81,000 crore from foreign loans. The number of ongoing projects has increased from 1,352 to 1,437, while new unapproved projects have decreased from 910 to 770.

The top five sectors receiving the highest allocations in the revised ADP are:
1. Transport and communication: Tk 48,253 crore
2. Power and energy: Tk 31,897 crore
3. Education: Tk 20,349 crore
4. Housing and community facilities: Tk 19,653 crore
5. Local government and rural development: Tk 16,909 crore

The Local Government Division received the highest allocation of Tk 36,158.96 crore, followed by the Power Division with Tk 21,475.11 crore, and the Roads and Highways Division with Tk 18,624 crore.

In the first seven months of the current fiscal year (July-January), ADP implementation was 21.52%, compared to 27.11% during the same period last year. Ministries and divisions spent Tk 59,877 crore during this period, down from Tk 74,464 crore in the previous fiscal year.

According to the Implementation Monitoring and Evaluation Division (IMED), the original ADP allocation for the last fiscal year was Tk 2.74 lakh crore, which was revised down to Tk 2.54 lakh crore. By the end of the fiscal year, ministries and divisions spent Tk 2.05 lakh crore, or 80.92% of the revised allocation.

In the 2022-23 fiscal year, the original ADP allocation was Tk 2.56 lakh crore, revised down to Tk 2.36 lakh crore. Actual spending was Tk 2.01 lakh crore, or 85% of the revised allocation. In the 2021-22 fiscal year, the original allocation was Tk 2.36 lakh crore, revised down to Tk 2.10 lakh crore, with actual spending at Tk 2.03 lakh crore, or 92.98% of the revised allocation.

In the 2020-21 fiscal year, the original ADP allocation was Tk 2.14 lakh crore, revised down to Tk 2.09 lakh crore. However, actual spending was Tk 1.71 lakh crore, or 82.11% of the revised allocation.