8th FYP: Why allocate more for transport and less for health, education?

The government, as in the past few fiscal years, is set to allocate more for the development of the transport and communication sector and less for health and education in the next budget – a strategy that deviates from the 8th Five-Year Plan (8FYP).

The 8FYP, a projected course of action for the July 2020-June 2025 period, has allocation targets for the Annual Development Plan (ADP) to achieve a set of development goals.

But the transport infrastructure sector is consistently getting about a 10% higher ADP allocation per fiscal year than the allocation prescribed by the 8FYP while the health sector is getting a 5% lower allocation. 

The same goes for the education sector as well, which begs the question — why make a long-term development plan and not stick to it?

Around 28.88% of the total ADP allocation for the fiscal year 2023-24 has been given to the transport and communication sector, while the 8FYP proposed an allocation of 17.4% to this sector, which is about 11.48% more allocation.

On the other hand, the health sector gets 5.6% of the total ADP allocation for the next fiscal year against 8FYP's proposed 11.1%.

Apart from this, the allocation for the housing and community facilities sector has been increased three and a half times, while the allocation for the social safety sector has been reduced by almost half.

Dr Mustafa K Mujeri, former director general of the Bangladesh Institute of Development Studies (BIDS), told TBS, "The government makes a five-year plan with a goal of development. It proposes allocation to different sectors according to the target. There should be an explanation if the allocation is reduced or increased in any sector."

"Development can sometimes be infrastructure-centric. But sustainable development can never be achieved by reducing the allocation in the health and education sectors," he added.

Questioned on the issue, State Minister for Planning Dr Shamsul Alam told The Business Standard (TBS) that the country's economic situation was different when the 8FYP was formulated. The situation has changed due to the Ukraine-Russia war. 

"At the time of preparing the plan, we did not know that we would have to face such a war situation. Besides, the rate of the US dollar stood at Tk85 before the war, which now has risen to Tk108. Hence, changes had to be made in the allocation for various sectors," he said.

The state minister also mentioned that many sectors cannot spend the allocation given every fiscal year due to a lack of capacity, referring to the health and education sectors in particular. There is no point in over-allocation unless it can be utilised. That is why the allocation for the health and education sectors is decreasing.

Why transport sector getting more allocation

Officials of the Planning Commission said the government has been giving utmost importance to the transport and communication sector for the past decade. The number of mega projects in this sector has also increased, alongside allocations.

In addition, many housing projects of the Ministry of Public Works are being implemented. These projects were not conceived during the preparation of the 8FYP. Apart from this, the housing projects of the city corporations have increased. 

Former Planning Division secretary Md Mamun-Al-Rashid thinks that the allocation in the transport and communication sector has been increasing due to the government's increased ability to spend money.

Dr Mustafa K Mujeri said the government makes development visible through infrastructure projects. Projects in the health and education sectors take time to implement and become visible. 

Budget allocation for any sector can increase due to political reasons as well. Officials in some ministries can influence the allocation process, which is apparent in the transport infrastructure ministries, Mustafa added.

Without allocation, the health sector won't develop

The 8FYP identified several challenges for the development of the health sector. According to experts, these challenges cannot be dealt with without the necessary funds proposed in the plan.

According to the 8FYP, strengthening Bangladesh's healthcare system will be the biggest development in the post-Covid-19 world.

There are also challenges in addressing mortality from non-communicable diseases. Reducing the out-of-pocket expenditures of medical care recipients and increasing the scope and quality of services are also some of the well-known challenges in the health sector. 

To meet these challenges, allocation for the health sector as a proportion of gross domestic product (GDP) is estimated in the 8FYP.

Officials of the Planning Commission said the government has given priority to the health sector in the five-year plan formulated at the time of Covid, but it has not been possible to spend the allocation as per target.

Tk19,278 crore has been allocated to the health sector in the current fiscal year's ADP, which was reduced to Tk12,745 crore in the revised ADP considering that it would not be possible to spend the amount. 

But there are yet fears that 100% of the revised allocation may not be spent by the end of this fiscal.

In the first 10 months (July-April) of the current financial year, the Directorate General of Health Services (DGHS) managed to spend only 33% of the allocated funds.

In the financial years 2021-22, 2020-21 and 2019-20, the DGHS could not spend 21%, 42.12% and 26% of the revised ADP allocation, respectively.

However, the allocation for the health sector in the ADP of the next fiscal has increased by around 27% as compared to the revised ADP of the current fiscal year. But there is uncertainty about how this money will be spent.

Dr Syed Abdul Hamid, a professor at the Institute of Health Economics of Dhaka University, told TBS, allocation for the health sector was reduced by almost 40% as compared to the plan. The government is now giving more importance to the electricity or housing sectors than the health sector. Every year ADP's budget for the health sector remains unused. 

There is no immediate impact on the health sector if the ADP allocation is reduced, but its effects will be seen in the future, the DU professor added.

The education sector remains ignored as well

According to Planning Commission sources, the third highest allocation (11.36% of total ADP allocation) has been given to the education sector for the next financial year. However, this allocation may be further reduced in the revised ADP.

The science and technology sector has been shown together with the education sector in the 8FYP. The plan proposed an allocation of 16.5% in FY2024 for these two sectors but the allocation is 13.5%. The allocation was lower than in the previous two financial years.

The eminent educationist, Professor Syed Manzoorul Islam, told TBS, "Lowering allocation for education will have a negative impact on the nation. More spending is required to achieve three things — ensuring education for all, digitalisation of education and paying good salaries to teachers. Besides, the government's Digital Bangladesh goal will also be hampered if the allocation is reduced in the education sector."