The government has scaled back its development budget for the current fiscal year 2024-25, cutting Tk49,000 crore from the original Annual Development Programme (ADP) allocation to Tk216,000 crore under the revised ADP, citing several key factors, including the impact of political unrest, rising construction costs, and slower-than-expected project implementation.
These challenges have led to a cautious approach in budget requests and a reduction in both government funding and foreign assistance.
The allocation under the revised RADP marks an 11.83% reduction from last year’s allocation.

In the previous fiscal year, only 80% of the Tk245,000 crore development budget was actually spent, amounting to Tk196,111 crore. Taking this into account, the National Executive Committee (NEC), chaired by the chief adviser, approved the revised budget on Monday. This budget cut from the original ADP includes government funding reduction by Tk30,000 crore and foreign assistance cut by Tk19,000 crore. Consequently, government contributions now stand at Tk135,000 crore, while foreign support has dropped to Tk81,000 crore.
Compared to last year’s ADP, the revised budget is down by Tk18,000 crore, a 6.84% decrease. Government funding has been cut by Tk7,500 crore, or 4.44%, while foreign aid has shrunk by Tk10,500 crore, a drop of 11.17%.
Why has the budget shrunk?
Officials from the Planning Commission have pointed to several reasons for the lower demand for funds this year.
Many contractors pulled out of projects during the July-August political unrest, while a change in government meant new tenders had to be issued.  On top of that, a significant number of project directors left their posts. While replacements have since been appointed, progress has been slow, and implementation has yet to pick up pace.

Rising costs have also played a role. The surge in prices for construction materials, coupled with a stronger US dollar, has made projects more expensive to carry out. As a result, ministries and departments have been cautious with their budget requests, fearing they may end up with unspent funds.
In an attempt to boost spending and speed up project approvals, the RADP now includes a Tk26,000 crore block allocation – an unusual move, given that previous budget revisions typically adjusted figures by only Tk500-600 crore.
Where is the money going?
Some sectors have been hit with major budget cuts, while others have received a boost. The transport and communication sector, which continues to receive the largest share of development funds, now has Tk48,253 crore.  This accounts for 22.34% of the ADP, though it is a drop from 28.87% in the previous fiscal year. The power and energy sector has taken a much harder hit, with its share slashed to 14.77%, compared to a hefty 34.24% last year.
In contrast, education has received a notable boost. It now accounts for 9.42% of the total budget, a significant jump from just 3.90% last year, making it the third-largest recipient of funds. The health sector, however, has seen a slight dip in funding, down to 3.92% from 4.18% in the previous year. Other key areas such as housing, community facilities, local government, rural development, agriculture, science and technology, and industry have all seen increases in their allocations.