ADP implementation hits 3-year low

The Annual Development Programme (ADP) implementation fell to a three-year low, with an execution of less than 50% in the first 10 months of the ongoing fiscal year.

According to a report released by the Implementation, Monitoring, and Evaluation Department (IMED) of the planning ministry Monday, the government spent 49.26% or Tk1.25 lakh crore of their allocated budget under the ADP in the July-April period of the fiscal year 2023-24.

The sluggish pace of ADP implementation has been attributed to the lack of capacity and resources of various ministries, organisations, and departments of the government responsible for executing development projects.

Experts said despite ambitious ADP targets set annually, the government struggles to fully implement projects within the designated timeframe.

As a result, budget cuts have become inevitable, with the current fiscal year’s ADP allocation already being revised downwards, they stated. The total ADP size, including the funding for autonomous organisations, stands at Tk2,74,674 crore for FY24. Of the amount, the planning ministry is responsible to spend Tk2,63,000. Analysts said the less-than-expected revenue collection has prompted the government to go for austerity measures, leading to slower ADP execution speed and subsequent budget cuts.

As a result, concerns loom over the timely completion of vital development projects critical for the country’s socio-economic advancement.
However, of the total amount spent, Tk70,908 crore was spent from the government funds, up Tk133 crore during July-April of FY24 from Tk70,775 crore spent in the corresponding period of the last fiscal. On the other hand, the expenditures from foreign funds in the first 10 months of the current fiscal stood at Tk48,468 crore, which was Tk44,214 crore in the same period of FY23. A total of 1,647 projects were included in the current fiscal’s ADP.

Of them, 1,588 are main projects, 50 sub-projects and nine development assistance projects. Among these projects, 114 are technical assistance projects and 1,396 investment projects. According to the IMED report, the Anti-Corruption Commission utilized the highest percentage of ADP allocation, reaching 96.85% during July-April FY24. Conversely, the Internal Resources Division could implement only 17.07% of its allocation during the same period.

Zahid Hussain, a former lead economist at the World Bank’s Dhaka office, said there might be a reduction in fund allocation for projects due to economic crisis. Projects are now categorised into three groups, which could potentially slow down the implementation pace, he mentioned. “However, it is crucial to avoid unnecessarily obstructing project implementation. Additionally, there is a need for caution in government spending, considering the projects financed through a loan from the Bangladesh Bank, raising concerns about further inflationary pressure,” he added.