ADP spending in Jul-Feb lowest in 12 years

Implementation of the Annual Development Programme (ADP) has reached its lowest point in at least 12 years, with about Tk 67,550 crore being spent in the first eight months of the current fiscal year (FY), according to available statistics.

This means just 24.27 percent of the total outlay for FY25 has been used so far while the implementation rate in the July-February period of FY14 stood at 38 percent.

Even during the same eight months in FY21, when almost all economic activities were put on hold amid the Covid-19 pandemic, the ADP implementation rate was higher at 33.83 percent.

In the July-February period of FY24, implementing agencies collectively utilised around Tk 85,600 crore, or roughly 31 percent, of their ADP allocations for that year.

Planning ministry officials said ADP implementation declined this fiscal year as development activities were hampered by political unrest soon after it began on July 1.

They also pointed to how the interim government has taken austerity measures, such as slowing or postponing certain projects initiated by the previous administration, in the face of budgetary shortfalls.

Furthermore, a number of contractors for various projects fled the country before completing their work following the recent political changeover, thereby adversely impacting ADP implementation.

In response to this underwhelming performance in ADP implementation, relevant authorities downsized the total outlay for FY25 by some Tk 53,000 crore to Tk 226,125 crore early this month to realign expectations with current realities.

A key finding of the reduced ADP spending was a sharp decline in the utilisation of state funds, accounting for just Tk 34,854 crore, or 21 percent, of the total allocation so far this year.

During the same eight months of FY24, the state coffer contributed Tk 49,800 crore for implementing the ADP, which was nearly 31 percent of the total allocation for that year.

Likewise, the utilisation of foreign funds fell to about Tk 27,470 crore, making up just 27.47 percent of this year's ADP allocation.

In the July-February months of FY24, around Tk 32,105 crore, or 34 percent, of the overall ADP budget for that year came from foreign funds.

It was also found that the performances of the 15 ministries, state divisions and departments scrutinised for their progress in implementing ADP funds varied greatly.

The Ministry of Science and Technology led the pack, utilising 41.98 percent of its allocation.

This was largely due to the ministry's rapid implementation of its Ruppoor nuclear power plant project, which is designed to bolster Bangladesh's power generation capacity.

The Power Division and Local Government Division were not far behind, with each reporting implementation rates of approximately 35 percent.

Their performances underscored a degree of resilience in sectors that are critical for developing domestic infrastructure and public service delivery.

However, these figures also signal that even implementing agencies with better performances were unable to utilise up to half of their ADP allocations in the first eight months of FY25.

Meanwhile, health-related sectors lagged significantly, with the Health Services Division reporting an implementation rate of merely 5.48 percent. This highlights severe challenges in executing projects that essential for public health.

Moreover, the Health Education Division and Family Welfare Division each implanted just 0.41 percent of their allocations for this year.

The performance of the education sector, another focus area for the government, also reflects the broader implementation challenges.

The Secondary and Higher Education Division managed to achieve just an 18 percent implementation rate, pointing to delays in upgrading and expanding local educational infrastructure.

Conversely, the primary and mass education ministry performed somewhat better with 27 percent implementation. However, this gap between the two indicates that higher education projects are facing more complex challenges, possibly due to bureaucratic red tape, logistical bottlenecks and procurement issues.