Planning Commission finalises ADP worth Tk2,65,000 crore for next fiscal

The Planning Commission has crafted a proposal for the Annual Development Programme (ADP) totalling Tk2,65,000 crore for the upcoming fiscal year 2024-25, emphasising priority areas such as transport, power and energy, and education sectors. 

The government will provide Tk1,65,000 crore from own funds to implement the proposed ADP while the remaining Tk1,00,000 crore will be mobilised as loans and grants from external sources, said officials of the commission.

They said that the extended meeting of the Planning Commission held on Tuesday (7 May) chaired by Planning Minister Abdus Salam decided to place the proposal to the meeting of the National Economic Council (NEC).

The final size of the ADP may change slightly at the meeting of the NEC to be held chaired by Prime Minister Sheikh Hasina, said Satyajit Karmaker, senior secretary of the Planning Division.

The NEC approved ADP worth Tk2,63,000 crore for the current fiscal year with a breakdown of Tk1,69,000 crore from the government exchequer and Tk94,000 crore from foreign sources.

The size of the ADP for the next fiscal will be increased by only Tk2,000 crore, mere 0.76% from the current fiscal year.

The commission proposed a decrease of Tk4,000 crore, about 2.37% from the current fiscal year from the government funds but proposed an increase of Tk6,000 crore 6.38% higher from foreign sources.

Whatever, the NEC cut down the ADP of the current fiscal year due to sluggish implementation and financial crisis and approved Revised ADP (RADP) worth Tk2,45,,000 crore. The size of the next ADP to increase by Tk20,000 crore, about 8.16% comparing the RADP of the current fiscal.

Analysing the series data of the Implementation Monitoring and Evaluation Division (IMED) of the Planning Ministry, it found that the allocation from government exchequer reduced slightly in the fiscal year 2008-2009, when the economy was facing several types of financial crises in the caretaker government regime.

The IMED statistics claim that government allocation for development has never decreased in any year since independence.
There is little opportunity to increase the development allocation from domestic sources considering the ongoing financial crisis, said Dr Ahsan H Mansur, executive director, Policy Research Institute (PRI).

He said that fiscal spaces of the government being reduced due to failure in mobilising revenue. Reducing aggregate demand will also hinder the imposition of higher taxes on imports. Provision of borrowing from banking sector also reduced due to liquidity crisis.

The economist also said that a sufficient control on public spending should be ensures to tackle the ongoing inflation. He said that the massive flu of cash would push upward the prices of commodities.

However, he suggested that the work of priority projects should be carried forward quickly without cutting the allocation of the projects on a mass basis.

Domestic fund allocation is under significant pressure:

The Planning Commission proposed allocation Tk20,391.19 crore less than the combined demand of all of the ministries and divisions to avail from the domestic fund, revealed an working paper presented in the meeting of the extended committee.

The paper revealed that all of the ministries asked for Tk1,85,391 crore from the government and the commission managed to allocate only 89% of the demand.

All of the implementing agencies placed demand worth Tk2,76,402.46 crore, while the Planning Commission reduced a lower amount which will make a shortage of Tk11,402.46 crore.

Whatever, the Planning Commission would impose an allocation worth Tk8,988.73 crore from the external sector, out of the demand to the implementing agencies.

The commission wants to allocate a total of Tk1,00,000 crore, Tk8,988.73 crore higher than the requirement of Tk91,011.27 crore to all ministries and divisions from foreign aid.

Highest priority on transport and communication:

In the continuation of the last few years, the transport and communication sector would get the highest priority in the development budget of the next financial year.

The sector would be allocated Tk70,688 crore, around 26.67% of the total ADP. Power and energy sector would secure the second place receiving an allocation Tk40,752 crore, about 15.38% of the ADP.

The third most priority sector education would receive Tk31,529 crore, about 12% of total ADP allocation.

The health sector would be recognised as the fifth priority sector following the housing and community facilities sector. Allocation of Tk20,683 crore will be proposed for health sector, 7.8% of the ADP.

Highest allocation in the favor of LGD:

The Local Government Division to get the maximum allocation under ADP in the next fiscal year as like the current fiscal. The division would receive Tk38,809 crore, which is 15.40% of the total proposed ADP.

The Road Transport and Highways Division is in the second position with 13% of ADP, Tk32,042 crores of allocation. The third position Power Division would be allotted Tk29,177 crore.

Apart from this, Ministry of Primary and Mass Education (Tk16,136 crore), Health Services Division, (Tk13,741 crore), Ministry of Railways (Tk13,726 crore), Ministry of Science and Technology (Tk12,887 crore) and Directorate of Secondary and Higher Education are at the top of the allocations.