ADP spending still in slow lane

Hasibul Aman

28 March, 2021 12:00 AM printer

The government’s yearly development plan is still moving at a slow pace as only one-third of the annual development programme (ADP) money has been spent in the eight months of the current fiscal year.

The Planning Ministry says development projects being implemented under the ADP are yet to gain the expected momentum from an abrupt slowdown caused by the coronavirus pandemic.

The ADP implementation slumped to five-year low at 33.83 per cent in July-February period of the ongoing FY 21, which was 37.26 per cent in the corresponding period of the FY 20, according to the data of the Implementation Monitoring and Evaluation Division (IMED).

 During the same period in the previous three fiscal years, the implementation rate was 39.13 per cent, 38.01 per cent and 36.91 per cent respectively.

“The Covid-19 pandemic has caused a squeeze on development activities, which has also been reflected in ADP implementation performance,” IMED Secretary Paradip Ranjan Chakraborty told the Daily Sun.

The year-on-year expenditure saw a 9.41 per cent negative growth this fiscal year as the total ADP expenditure fell by Tk 75.40 billion to Tk 726.03 billion from Tk 801.43 billion one year ago.

 Even the total spending from ADP money was higher at Tk 707.72 in the July-February period of 2018-19 fiscal year.

 The poor performance of local resource utilisation to a large extent mainly contributed to the gloomy ADP performance even after eight months.

 The spending from the government money hit a five-year low at 34.27 per cent with Tk 461.39 billion total expenditure against Tk 40.14 per cent or Tk 525.48 billion expenditure from this segment a year earlier.

 Project assistance utilisation also slipped in terms of both percentage and expenditure in the current fiscal year though not at the level of local money expenditure.

ADP implementing agencies have managed to spend Tk 244.69 billion or 34.71 per cent from the project assistance allocation, down from Tk 254.81 billion or 35.49 per cent ADP spending from overseas funds during the period.

Former lead economist at the World Bank’s Dhaka office Dr Jahid Hussain sees two major reasons -- foreign project people not fully returning to work and Finance Ministry’s stopping of fund release to low-priority projects -- as the main reasons behind the ADP slowdown this year.

“We can speak about the specific reasons for such a fall in the ADP implementation where expenditure growth has also been negative by a large margin. But we can only guess about the reasons for this,” Dr Jahid commented.

“Work on large projects, including Metro Rail, Padma Bridge and Karnaphuli Tunnel, was severely disrupted by the pandemic as many foreign consultants and workers could not join their work,” Dr Jahid added.

 Referring to a Planning Ministry’s version regarding the ADP implementation, he said construction-based projects could not be implemented maintaining their previous pace.

 The noted economist also reminded that the Finance Division stopped fund release to low-priority projects in July last year and asked ministries and divisions to set priority of their projects, which may have caused the poor ADP performance. “As a result, the ADP money spending could not reach the usual level like previous fiscal years,” he asserted.

Apart from these, he also blamed the development administration for their years-long practice of including “unready” projects in ADP for the lackluster ADP performance.

Internal Resources Division (IRD) and Public Administration Ministry were the worst ADP performers as they failed to reach even a two-digit mark.

Their performances were 1.85 per cent and 8.51 per cent respectively.

  The IMED secretary had informed earlier that the poor performance of IRD, commonly known as the National Board of Revenue, due to the disruption in implementing their key project to install fiscal devices was a major cause of the ADP fall.

Meanwhile, 15 large ministries or divisions that fetched 81.63 per cent ADP money could achieve 35.21 per cent overall ADP execution rate.

Of them, the Prime Minister’s Office achieved the highest rate of 48.07 per cent while Primary and Mass Education Ministry posted 42.05 per cent, Power Division 41.95 per cent, Industries Ministry 39.82 per cent, Water Resources Ministry 39.65 per cent and Local Government Division 36.09 per cent.

 Dr Jahid Hussain thinks that Bangladesh economy is yet to fully recover from the Covid-19 impacts to the pre-corona level and it has reflections in most indicators like private investment, exports, revenue collection, capital machinery imports and ADP implementation.