Covid urgencies take a back seat in ADP priorities

Development priority of the government has remained unchanged in the budget as transport, power and housing sectors have got more allocations like the previous years despite crisis in people's livelihood, income and employment in the country triggered by the Covid-19 pandemic.

Health, agriculture and employment generation have been given priority while allocating resources for the Annual Development Programme (ADP), Finance Minister AHM Mustafa Kamal said in his budget speech, but none of these sectors is among the top three recipients of the ADP allocation.

The government has approved the ADP for the next fiscal year ensuring the highest allocation, Tk61,721 crore, for the transport and communication sector, which is 27.39% of the ADP. The power and energy sector has been provided with the second-highest allocation with Tk45,867.84 crore or 20.36% of the ADP.

Besides, the housing and community facilities have received an allocation of Tk23,747 crore or 10.54% of the ADP.

The education sector has received the fourth highest Tk23,178 crore or 10.29% of the ADP while the health sector has got Tk17,307 crore or 7.67%. The agriculture sector has been placed at the bottom of the 15 sectors.

Experts and analysts said the government failed to change the priority areas of investment due to the lower implementation capacity and absence of the new projects. They also blamed a large number of carry-over projects in the ADP.

The National Economic Council (NEC) approved a new ADP worth Tk2,25,324 crore last month, of which Tk1,37,299.91 crore will be provided from government funds and Tk88,024.23 crore will come from foreign assistance.

The new ADP is 9.84% higher than the original ADP of the current financial year and 14% higher than the revised one.

In the next fiscal year, projects worth Tk11,469 crore will be implemented with funding from autonomous organisations and corporations. The size of the ADP including projects of autonomous agencies and corporations is Tk236,793 crore.

Towfiqul Islam Khan, a senior research fellow at CPD, said, "Our concern is whether there will be a qualitative change in the implementation of our projects. It is important to finish a project on time. However, there is no effective announcement in this regard in the proposed budget."

He said, "Many projects that were supposed to be completed last year have been included in the new ADP. Apart from that, there are also many expired projects in the ADP. Many projects awaiting completion this year have not been able to secure the required allocations."

Despite the Covid-19 pandemic, the Health Services Division spent around 25% of the allocation in the Annual Development Programme (ADP) in 10 months of the current fiscal year.

At the same time, the Medical Education and Family Welfare Division could not spend 50% of the allocation.

So, the government has allocated only 7.68% of the ADP to the sector. The allocation was 7.55% in the revised ADP for the current financial year.

The power and energy sector has received the second-highest allocation this time due to the Rooppur nuclear power project.

The Rooppur nuclear power plant has been in the science and technology sector in the past years but this is the first time it has been added to the power and energy sector.

A total of 1,427 projects have been included in the ADP with allocation. Of these, 1,308 are investment projects and 118 are technical projects. Besides, 89 projects of self-financing by autonomous agencies and corporations have received allocations.

The number of unapproved projects in the next ADP is 596, which will receive approval in phases. Besides, 1,291 government-funded projects were proposed by different ministries for inclusion in the list of unapproved projects.

To facilitate foreign aid, another Tk141 crore has been kept for the unapproved projects.

CPD Executive Director Dr Fahmida Khatun thinks that it will not be possible to implement more than 80% of the revised ADP in the current financial year. The implementation of ADP in the first 10 months of the financial year is at a record low. Government spending on the Covid-19 epidemic should have been increased.

She added that the highest allocation in next year's ADP is in the transport and communications sector followed by electricity and fuel. These two sectors account for about half of the ADP allocation.

The importance of investing in the physical infrastructure sector in developing countries is increasing. However, the social infrastructure sector must also be given importance, she said further.

She has pointed out that there are not many leaps in the new budget allocation for the health sector. Although the allocation has increased by several crores of taka, there is no new programme outside the two projects to be aided by the World Bank and the Asian Development Bank.

The carry-over projects in ADP have increased due to the untimely completion of work. As a result, the pace of implementation slows down further due to reduced allocation per project. The project which is nearing completion should be completed soon with additional allocation. However, the allocation for such projects in the new ADP is only 26% of the demand.

Many projects have expired but are still ongoing. Existing projects in the ADP are taking an additional three to five years on average.

Despite the allocation of 23% of the total ADP in the 14 largest projects, the implementation is not getting the expected pace.

The allocation priorities in the new ADP have not changed. Apart from that, there is no new initiative in using foreign aid.

She feared that if no initiative was taken in this regard, the expenditure would increase further in the future due to stagnation.