Govt to slash ADP allocation drastically

The government is set to slash allocations for development spending by 12.5 percent in the current fiscal year 2025-26 (FY26), as the originally allocated fund remains largely unspent in the first five months.

Ministries and divisions spent only 11.75 percent of the total Tk 2,38,695 crore allocated under the Annual Development Programme (ADP) in the July–November period, the lowest since FY11.

According to a draft of the revised ADP, prepared by the Planning Commission, allocations are set to drop to Tk 2,08,935 crore, down Tk 30,000 crore from the original plan.

The draft, seen by The Daily Star, is scheduled to be presented at today’s meeting of the National Economic Council, chaired by Chief Adviser Muhammad Yunus, and will take effect from 1 February once approved.

Speaking on condition of anonymity, a planning ministry official said the draft was finalised considering implementation capacity.

Last fiscal year, ADP spending was low due to political and administrative disruptions following the student uprising. This year, despite relative stability, implementation has not improved.

“The slowdown in public investment, while private investment remains muted, is a concern for growth,” the Centre for Policy Dialogue (CPD) said in its independent FY26 economic review released on 10 January.

Under the proposed plan, the health sector is going to face a significant cut in allocation because of its poor performance in terms of implementation. Similarly, allocations in the agriculture, education, and power sectors may also decrease.

According to the draft, among the five sectors receiving the highest allocations, transport and communication will receive Tk 38,509 crore or 19.25 percent of total revised ADP and power and energy Tk 26,186 crore or 13.09 percent.

Housing and community facilities will receive Tk 22,729 crore, education Tk 18,549 crore, and local government and rural development Tk 15,142 crore.

 These five sectors account for 60 percent of the total revised allocation for FY26.

The draft also proposes raising the total number of projects for the fiscal year to 1,330 from 1,173 in the original ADP, with 138 newly approved initiatives.

Although allocations for many projects are being reduced, some may see increases.

The Dhaka–Ashulia Elevated Expressway, funded by Chinese loans, may see an increase in funds from the original Tk 3,341 crore, while allocations for Japan-funded projects such as the Metro Rail and Matarbari Deep Sea Port may be trimmed.

The Rooppur Nuclear Power Plant construction allocation will remain unchanged.