ADP implementation declines despite govt emphasis on spending ahead of polls

The implementation of the Annual Development Program (ADP) allocation for the first five months of the current fiscal year plummeted to 17.06%, the lowest in the last eight years, according to data from the Implementation Monitoring and Evaluation Division (IMED).

Ministries and divisions of the government spent Tk265 crore less than the amount expended during the corresponding period of the previous fiscal year when the implementation rate stood at 18.41%.

Previously, the ADP implementation rate was as low as 16.84% in FY 2015-16.

At the beginning of the current fiscal year, the government emphasised increasing ADB spending ahead of the upcoming election, especially on projects related to roads, railways, ships and water resources, which are in the final stage of implementation, according to IMED officials.

The implementation speed in projects at the beginning and middle stages could not be increased, they added.

Largely due to the economic situation and the dollar crisis, the purchase of goods from abroad has led to many development projects being stalled.

In addition, the price hike of construction materials and election-centred turmoil has slowed many contractor jobs.

Earlier, the government had taken initiatives to increase spending on various development projects ahead of the 2018 elections, leading to an increase in the ADP implementation rate in the July-November period to 20.11%, up from 19.13% and 16.84% in the previous two fiscal years.

Dr Mustafa K Mujeri, former director-general of the Bangladesh Institute of Development Studies (BIDS), said, "ADP implementation rate slows down in most projects during an election year due to uncertainty among contractors about the bill. The economic crisis has added to the slowing down of the implementation rate this year."

Professor Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue, told The Business Standard the slow pace of implementation of the ADP is causing delays and cost overruns in projects. 

"This is reducing the economic rate of return from these projects. Without the rational pace of ADP implementation, private sector investment is damaged. At the same time, the slow pace of ADP implementation negatively affects employment, revenue collection and achieving economic growth," he said.

However, the expenditure of foreign aid increased in the July-November period of the current fiscal year, according to IMED.

In the first five months, the rate of disbursement of ADP allocation from foreign aid funds was 19.17%, which was 19.08% during the same period of the previous fiscal year.

On the other hand, the disbursement rate from government funds dropped to 16.15%, from 17.93% in the last fiscal year.

Meanwhile, various organizations have spent 13.23% in the July-November period of FY23-24 from the allocation of their funds, which was 19.37% during the same period last year.

According to IMED data, the ministries and divisions that have implemented more than 20% of ADP allocation during the July-November period include the Local Government Division (24.12%), Power Division (20.21%), Ministry of Railways (26.96%), Bridges Divisions (20.08%), Ministry of Civil Aviation and Transport (27%), and Ministry of Agriculture (25.56%).

The ministries and divisions that implemented less than 20% include the Department of Secondary and Higher Education (9.85%), Department of Road Transport and Highways (12.09%), Ministry of Science and Technology (14.59%), Department of Health Services (10.64%), Ministry of Primary and Mass Education (15%), Ministry of Shipping (6.66%), Ministry of Water Resources (18.18%), Ministry of Housing and Public Works (18.21%), and Ministry of Industries (15.27%).