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Development spending cut likely

  • Published at 06:51 pm March 19th, 2016
Development spending cut likely

The government is likely to slash its annual spending by over 9% or Tk9,000 crore on improving the standard of people’s life as most ministries and divisions usually failed to spend their allocations.

In the current fiscal year, the government targeted to spend Tk97,000 crore in the Annual Development Programme (ADP).

“This might be reduced to Tk88,000 crore in the annual development programme (RADP) to be revised next month,” said an official in Economic Relations Division (ERD).

“The ADP implementation is a crucial to the government attempt to achieve its annual economic targets, but slow spending hampers the development,” he said.

In the previous fiscal year, the government trimmed over Tk20,000 crore in framing RADP, down 25% from original ADP outlay of Tk80,314 crore.

Traditional practice of frequent revisions to ADP paves the way for draining public money and wastage of time, which undermines the objective of public investments, analysts say.

The government in first eight months of the current fiscal year spent 34% to Tk34,674 crore out of the entire annual ADP allocation of TK97,000 crore, according to the latest Implementation Monitoring and Evaluation Division.

This means the government will have to spend the remaining 66% or over Tk62,326 crore in four months, which is a difficult task.

Former finance adviser to the caretaker government, Mirza Azizul Islam, said the original allocation is always ambitious, but the implementation remains much lower, which has become a tradition in the country.

“ADP with too many projects always has pushed up implementation period and costs of the projects, and damaged quality of works. The problems, however, are not new in ADP implementation,” he said.

He said weak monitoring is always blamed for not speeding up development works across the country.

For this fiscal year, ADP consists of 1,215 projects, including state-funded 125, under 53 different ministries and divisions.

In setting the next RADP, the government planned to cut fund allocation both from internal and external sources.

Around Tk34,500 crore was allocated from the external sources like development partners and the rest Tk62,500 crore from the internal sources.

The expenditure from project assistance was much lower than that of the government-funded projects, which has left billions of dollars as foreign assistance unutilised.

At present, the unutilised concessional foreign assistance has crossed US$18 billion-mark, according to the ERD data.

Officials said the public agencies performed worst in spending the project aid in proportion to the funds from the government internal resources in the current fiscal.

The country’s ever largest project Padma Multipurpose Bridge might also not be able to spend the entire allocation of Tk7,100 crore for the current fiscal year.

Earlier, for slow implementation of the ADP, the World Bank found loopholes like low allocation for projects, adoption of too many projects and excessive expenditure every last fiscal quarter.

A highly bunched pattern of reported ADP expenditure, particularly in the last quarter, has raised questions about the credibility of expenditure utilisation and implementation, the WB said.