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The government is set to approve the Revised Annual Development Programme (RADP) by reducing the allocations in important sectors, like education and health.
The size of the RADP is going to be Tk 2.45 lakh crore — a Tk 18,000 crore drop from the original ADP size of Tk 2.63 lakh crore in the national budget of FY2023-24, sources said.
The National Economic Council (NEC) meeting, to be chaired by Prime Minister Sheikh Hasina, on Tuesday is likely to approve the RADP for the rest of FY24, said officials at the Ministry of Planning's Implementation Monitoring and Evaluation Division (IMED).
In the RADP of FY2022-23, Tk 18,500 crore was reduced from the original ADP allocation.
This time, only 7.03 per cent of the RADP is earmarked for the education sector. From that, 118 projects in this sector will get a total allocation of Tk 17,223.01 crore, which is at least Tk 12,500 crore less than the original ADP allocation.
On the other hand, Tk 12,066.76 crore is being allocated for 61 projects in the health sector, which is about 5.93 per cent of the RADP. The sector’s allocation has been slashed by about Tk 4,000 crore.
Due to the slow pace of project implementation, the allocation of more than Tk 16,500 crore is being reduced in these two sectors — which is the highest cut in allocation of the RADP.
According to sources, Tk 10,500 crore of foreign assistance is being reduced in the RADP. As a result, the amount of foreign assistance stands at Tk 83,500 crore while money allocated from domestic sources is decreasing by Tk 7,500 crore to Tk 1,61,500 crore.
‘Govt doing the opposite’
Zahid Hussain, former lead economist of the World Bank's Dhaka Office, told The Business Post that the budget proposals placed in Bangladesh are always ambitious. As a result, it is never possible to implement fully.
“The biggest crisis at present is inflation and the dollar crisis. Thus, the government is trying to save money. Right now, the implementation of foreign-funded projects should be increased. But the government is doing the opposite by reducing the foreign allocation,” he said.
The economist believed that to reduce inflation and the dollar crisis, foreign-funded projects should be implemented more. By doing that, the flow of money to domestically funded projects will decrease and the flow of dollars will increase.
Earlier this month, the Ministry of Planning held a meeting with the top officials and project managers of various ministries and departments, where the project officials gave their opinions in favour of project support. Ministry officials said that the ADP size is being reduced based on their opinions and implementation capacity.
Bangladesh spends the least in the Asia-Pacific region on education and health as a proportion of gross domestic product (GDP). About 2 per cent of GDP is being spent on education, and in the health sector, it is less than 1 per cent. Economists and researchers have been calling for increasing allocations to these two sectors for a long time.
Zahid said these sectors have not taken the initiative to build the capacity to spend the project money for many years. As they cannot spend what they get, it compels the government to slash the amount. Therefore, efficiency should be increased by raising the allocation in these two sectors. To increase institutional efficiency, qualified manpower must be provided.
Sector-wise allocations
According to sources, 15 sectors are getting 91.28 per cent allocation in the revised ADP.
In terms of allocation, the transport and communication sector is at the top with Tk 63,263.31 crore, which is 25.82 per cent of RADP. There are 258 projects in this sector.
The power and energy sector is getting the second highest allocation — Tk 37,897.73 crore, which is 15.47 per cent of RADP. The third highest allocation is in the housing and community facilities sector — Tk 28,002.83 crore or 11.43 per cent of RADP.
Apart from this, in the RADP, Tk 19,970.71 crore for 115 projects is going to the local government and rural development sector (8.15 per cent of RADP); Tk 10,317.76 crore for 160 projects in agriculture (4.21 per cent of RADP); and 39 projects in law, order and security sector are set to get Tk 3,376.92 crore (1.38 per cent of RADP).
