ADP cut okayed

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Amid a slow rate of Annual Development Programme (ADP) implementation, the National Economic Council (NEC) yesterday approved the revised ADP budget of Tk 22,500 crore for the current fiscal year.

Thirty-five percent of the revised ADP budget is locally funded while the rest is funded by foreign resources.

The original ADP for the fiscal year 2008 was Tk 26,500 crore. The government cut funds mainly from power, health, education, agriculture and transport sectors, constituting 66 percent of the total reduction.

Planning ministry officials said contributions of domestic resources in the ADP were higher in the last few years’ budgets but this year it came down to as low as 35 percent.

“The contributions of domestic funds in the ADP were between 50 and 53 percent in the last few years and in the original ADP of the current fiscal year, local resources shared 51 percent of the funding,” said a planning ministry official.

Finance Adviser Mirza Azizul Islam, who chaired yesterday’s NEC meeting, said, “Overall contribution of local resources in the budget is not low if we combine contributions in revenue and development budgets.”

Chief Adviser Fakhruddin Ahmed was scheduled to chair the meeting but he delegated the authority to the finance adviser on account of his illness.

The finance adviser said even though it is a big reduction, it would not affect the country’s economy.

He said the average spending of the ADP in the last few years’ budgets show that real implementation is not more than 17-18 percent.

Allocations from local resources in the revised ADP have been slashed by 41 percent or Tk 5,552 crore, bringing the revised allocation down to Tk 7,973 crore from the original Tk 13,525 crore.

But, allocations from foreign resources were increased by 15 percent or Tk 1,552 crore, pushing those up to Tk 14,527 crore in total from the original amount of Tk 12,975 crore.

Describing the increase of foreign resources in the ADP, an official of the planning ministry said a handsome amount of foreign aid has been received this year as budgetary support following floods and cyclone Sidr.

Donors’ increased budgetary support to Tk 5,425 crore, 158 percent more than the previous year.

Even though the power sector is a priority, the revised ADP cut Tk 644 crore from the sector’s development projects and it now stands at Tk 2,989 crore. The revised ADP set a target to spend Tk 1,341 crore in the agriculture sector, reducing Tk 241 crore.

As per the revised ADP allocations, development projects under the education ministry will spend Tk 3,029 crore, reduced by Tk 721 crore. The health sector’s development budget was cut by Tk 286 crore and the revised budget allocated Tk 2,442 crore.

Development projects of the transport sector will have Tk 2,551 crore to spend after receiving a Tk 752 crore cut.

Briefing newsmen after the meeting, the finance adviser admitted that the government reduced the development allocation due to low ADP implementation rate. A number of the sectors, like power and transport, have surrendered money to the finance ministry as they have observed that it was not possible for them to spend the money within the current fiscal year.

He said agriculture, power, education and communication sectors share 72 percent of the total allocation in the revised ADP.

The NEC yesterday approved a special allocation of Tk 20 crore to improve the livelihoods of people in 10 districts where poverty rate is 48 percent or more.

The districts were selected following a survey on household expenditures carried out by the Bangladesh Bureau of Statistics (BBS). The government selected 198 upazilas of Rangpur, Dinajpur, Pabna, Mymensingh, Jamalpur, Jessore, Khulna, Patuakhali, Rangamati and Bandarban for its district development programme.

The government in implementing the programme will involve local government bodies for socio-economic development of poor people in the areas.

The NEC meeting yesterday also discussed the ADP implementation done in eight months of the fiscal year, between July 2007 and February 2008. Thirty percent of the original allocations were utilised.

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