The country's trade and commerce have come to a standstill due to the spread of coronavirus resulting in a major catastrophe in revenue collection. Therefore, the government has decided to carefully prioritise its expenditure.
The finance ministry has directed all ministries and divisions to stop spending on ‘low priority’, or less important, and medium priority development projects under the Annual Development Program (ADP) in the current fiscal year (FY) 2020-21. However, careful consideration must be taken before spending money on 'medium priority' projects. But spending money on the ‘high priority’ projects has been asked to continue.
The Finance Division issued a circular on Wednesday (July 7) to the Cabinet Division Secretary, Prime Minister's Office, Bangladesh Auditor General and the Secretary of all Ministries and Divisions with all such instructions for the implementation of the ADP for this fiscal year.
The circular will be effective immediately.
In the circular, the finance ministry said high medium and low priorities have been set for projects under ADP for FY 2020-21 to ensure cost-effective use of limited resources.
Moreover, the government has decided to take up three procedures for the smooth implementation of the projects included in the ADP.
Firstly, ministries, divisions or other institutions and subordinate departments or agencies will continue to implement high priority projects on a regular basis.
Secondly, ministries, departments or other agencies and subordinate departments or agencies will, at their discretion, spend money in all sectors of the projects in which the use of funds is deemed inevitable in the case of projects identified as "medium priority". However, in cases where it is possible to avoid spending money, spending must be avoided.
And lastly, exemptions for projects marked "low priority" will be suspended for the time being.
However, projects under implementation by the Ministry of Health and Family Welfare and the Ministry of Agriculture will be excluded from the scope of this circular. In case of release of project funds, it is necessary to follow the existing financial rules and regulations including the release of funds and utilization guidelines 2018 of the development project of the finance department.
According to the finance ministry, ADP has been allocated Tk 2,05,145 crore in the current financial year.
A senior finance ministry official said the government's revenue collection is currently very low. In the just-concluded 2019-20 financial year (revised), the National Board of Revenue has collected about Tk 80,000 crore less than the target. Therefore, expenditure on a priority basis is needed.
Meanwhile, according to NBR, the fragile state of revenue collection amid the pandemic broke all past records. In the 11 months of the just-concluded 2019-20 fiscal year, revenue collection was Tk 76,251 crore less than the revised target. Growth was also in negative numbers.