February 28, 2017 - 5:49pm
The government is set to cut the size of the annual development programme by 5.87 per cent or Tk 6,500 crore for the current fiscal year of 2016-2017 mainly due to its failure in spending foreign fund meant for the programme.
The planning ministry will place a proposal to downsize the revised ADP to Tk 1,04,200 crore from the original outlay of Tk 1,10,700 crore at a meeting of the Executive Committee of the National Economic Council for approval, officials of the ministry said.
The meeting will be held today at the NEC auditorium with prime minister Sheikh Hasina in the chair.
The prime minister at the meeting may raise the government funding in the revised ADP, the officials said.
They said that the slow progress in implementation of the development projects funded by international lenders and development partners forced the ministry to slash the overall allocation for the revised ADP though the government funding in the programme was set to increase.
The size of the ADP, including allocations for autonomous bodies for implementing self-financed projects, however, would stand at Tk 1,12,796 crore after downsizing from the original outlay of Tk 1,23,346 crore as the bodies would face a huge cut in the allocations for them.
According to the planning ministry proposal, the size of the foreign fund would be cut by 17.5 per cent or Tk 7,000 crore while the government funding would be increased by 0.71 per cent or Tk 500 crore in the revised ADP.
The allocation under the autonomous bodies including corporations would also be cut by 32.03 per cent or Tk 4,050 crore in the revised ADP.
The ministry will propose setting the foreign fund allocation at Tk 33,000 crore, down from the original allocation of Tk 40,000 crore.
The government funding would stand at Tk 71,200 crore from the original outlay of Tk 70,700 crore in the revised ADP if the ECNEC approves the planning ministry proposal.
The allocations from autonomous bodies are also set to reduce to Tk 8,596 crore from the original Tk 12,646 crore.
Planning minister AHM Mustafa Kamal admitted that the allocation of foreign fund was set to be cut for fear that the government agencies would not be able to spend fully the fund originally allocated.
Implementation of foreign-funded development projects have been hampered due to the Gulshan extremist attack in July last year as most of the foreign employees had left the country after the incident, he said at a press briefing held at his office on Monday.
‘The absence of foreign manpower hampered execution of foreign-funded projects particularly mega projects like Metro Rail, Padma Bridge and Matarbari Power,’ he said adding that the foreign personnel came back after six months of the Gulshan incident.
The government has also ensured security at all project sites so that foreigners feel safe, he said.
Kamal said that the government funding would be raised in the revised ADP to fend off the impact of a reduction in foreign fund allocation.
In reply to a question about the unused foreign fund in the pipeline that reached $36.54 billion as of Monday, he said that the size of unused money in the pipeline had been increasing in recent years due to a rise in commitments by the international lenders and donors to invest in the country.
The ADP implementing agencies have also deficit in capacity to spend the money in time, he said adding ‘disbursement of foreign fund also takes longer time’.
Of the total ADP allocation, the transport sector has received highest 24.34 per cent or Tk 25,359.60 crore followed by infrastructure, water supply and housing sectors with 13.41 per cent or Tk 13,977.46 crore and education and religious affairs 12.20 per cent or Tk 12,712.97 crore.
The power sector has got 11.85 per cent of the allocation while rural development and rural institutions 9.55 per cent, science and ICT 5.25 per cent, agriculture 4.97 per cent and health 4.76 per cent.