ADP austerity to continue in next fiscal

The austerity in public spending will continue in the next fiscal year’s Annual Development Programme (ADP) in a bid to ease the escalating tension over economic uncertainty.

The Planning Commission is likely to resort to priority-based ADP fund release in FY 2023-24 like the current fiscal year, the commission suggested.

No unnecessary new projects will be picked up while special emphasis will be put on mobilising foreign loans, according to the new ADP policy issued by the Planning Commission.

In the context of a new economic crisis across the world, the government adopted austerity in ADP spending from the very outset of the current fiscal year.

Fund release for 81 projects has been kept fully suspended while 25 percent allocated fund was not released for 636 projects.

As a result, ADP implementation slumped to the 12-year lowest level in the month of January. In view of this, funds were curtailed from even some fast-track or large projects.

The Planning Commission has asked line ministries for giving emphasis on completing ongoing projects instead of undertaking new projects while discouraging inclusion of Bangladesh government-funded new projects in the upcoming ADP given the resource constraints.

However, it encouraged taking new projects with foreign loans and allocating funds on priority basis, contracts for which have already been signed.

Besides, priority will be given on projects that can boost food security. It has also been instructed not to include old projects in new ADP which are supposed to end by the current fiscal year.

“The Russia-Ukraine war has made many things uncertain. The low revenue collection has compounded the situation. At this moment, there can’t be any reason for allocating money against unimplementable projects,” Planning Minister MA Mannan said.

“The reality is even the allocated money can not be spent because of management problems, bureaucratic tangle and some other reasons,” he stated, adding that the government will emphasise proper utilisaton of the allocated money and timely project implementation with maintaining quality.

Planning Commission officials informed that they were working on ADP proposals sent from different ministries to prepare next fiscal year’s ADP. The officials said they already held a number of meetings with the line ministries.

Primarily, the ministries and divisions send their primary project proposals to the programming division of the Planning Commission while at the second stage, the allocation related discussions are held.

According to the ADP formulating policy, the ADP size may be shorter in the next fiscal year compared to that of the current fiscal year. The new ADP may get approval in early May, sources familiar with the issue added.

However, a recent meeting of Council for the Coordination of Fiscal, Monetary and Exchange Rate Policies with Finance Minister AHM Mustafa Kamal in the chair approved an estimated Tk 2.63 trillion budget for FY 2023-24 which is 6 to 8 percent higher than current fiscal’s main ADP. The figure is yet to be finalised.

“There is still scope for increasing development activity by squeezing misuse of money. At least, large projects should be finished,” said Policy Research Institute (PRI) executive director Ahsan H Mansur.

He also supported the government strategy for giving priority on the projects to be taken with foreign loans in the current context.