ADP implementation falls to four-year-low during July-May of FY24

Bangladesh’s revised development budget implementation stood at 57.54%, in the first 11 months of the ongoing fiscal year 2023-24 (FY24), the lowest in four years.

According to a report released by the Implementation Monitoring and Evaluation Division (IMED) on Wednesday (26 June), 42.46% of the revised Annual Development Program (ADP) allocation remained unutilised as the fiscal year nears its end.

The ADP implementation rate during the same period last fiscal stood at 61.73%. It was 64.84% in the previous fiscal.   

The revised ADP allocation for the current financial year was set at Tk2,54,391.64 crore, including the own funding of various organisations, out of which the ministries and departments of the government managed to spend Tk146,375.50 crore during the said period.

Abul Kashem Md Mohiuddin, secretary, IMED, told The Business Standard that many projects have been completed. “But implementation rates may be low due to non-payment of bills.”

However, he believes that the implementation will take a big leap in the last month of the fiscal year.

He also said the IMED will review the reason for the lower ADP implementation rate. Steps will be taken to speed up implementation from the beginning of the next fiscal year.

Md Mamun-Al-Rashid, former secretary to the Planning Division, told The Business Standard that despite having a work plan and purchase plan throughout the fiscal year for the government’s budget expenditures, the officials concerned do not follow them.

“For this reason, ADP is still traditionally implemented in our country. It is observed that half of the money is spent in the first 9-10 months of the financial year. A major portion is spent in haste during the final two-three months,” he added.

He also said although officials lack skills, the major limitation is that implementation is not done according to the action plan and purchase plan. To address this, he recommended that all officials, project managers, and heads of organisations concerned be held accountable.

According to IMED data, funds for ADP are allocated from three sources: government treasury funds, development aid, and loans and grants. Additionally, government agencies have some allocations from their own funds.

Data further shows that the utilisation of government funds and foreign debt-grants has decreased in the current fiscal year. While spending from the agencies’ own funds has increased.

Government agencies spent 52% of the targeted expenditure from public funds in ADP during July-May, compared to 57.41% in the equivalent period of the last fiscal year.

In the same period, 65.81% of the allocated foreign loans and grants were spent, compared to 70.86% a year prior.

Of the ADP, 77.19% was allocated to 15 major ministries and departments. Among these, several ministries and departments with the highest allocations are lagging in implementation. For instance, the shipping ministry has spent 42.43% of its allocation, the Bridges Division 49.42%, and the Health Services Division 43%.

Additionally, the Road Transport and Highways Department utilised 52.78% of the allocated fund, the Prime Minister’s Office 52.87%, the Ministry of Housing and Public Works 54.07%, and the Department of Secondary and Higher Education 58.23%.

Among the ministries and departments that have received higher allocations, some have slightly better implementation rates.

For instance, the Power Division utilised 77% of the allocated fund, the Ministry of Science and Technology 72.98%, and the Ministry of Agriculture spent 71%.