The government may trim the development budget down by 8.0 per cent to Tk 2.07 trillion as project execution loses steam, as of the first half (H1) of this fiscal, officials say.
It is being compelled to cut the annual development programme (ADP) outlay due to low foreign-funded project-implementation rate during the H1 of the current fiscal year (FY) 2021-22, they said Monday.
The size of the ADP for the current fiscal is Tk2.25 trillion. The Planning Commission (PC) now gets down to finalising the RADP for the current FY2022.
"We have been working to prepare a RADP for the current fiscal. We are hopeful of completing the work by end of this month," Md Sayeduzzaman, additional secretary of the PC, told the FE.
"We have already got the fund requirements from different ministries and divisions. Now we are working on the (revised) fund demands," he adds.
According to the PC, it is likely to keep aside similar amount of Tk1.37-trillion outlay from the government's internal resources while Tk702.50 billion from foreign funds.
Government ministries and agencies had sought 20-per cent lower funds than their current Tk880.24 billion allocations from project aid (PA) financed by the overseas development partners.
Sluggish project-implementation progress under different ministries makes the government mull over slashing foreign aid by 20 per cent in the revised development budget, officials say.
The Economic Relations Division (ERD) has already revised downward the PA outlay to Tk 702.50 billion from Tk 880.24 billion and sent it to the PC for finalising the RADP for the current FY2022.
Another senior PC official says many ministries and division have sought higher funds from government's internal resources while they demanded lower funds from the available foreign aid (PA) sources.
"They are more interested to spend money from the government's internal resources. On the other hand, they may not give much effort in spending the foreign aid-funded projects due to strict monitoring by the development partners."
Implementation Monitoring and Evaluation Division (IMED) data show that the public agencies spent 22 per cent from their Tk880.24 billion PA outlay in the current ADP during the July-December period.
However, they spent more than 25 per cent of the Tk1.37 trillion government allocations in the current ADP.
"It is interesting to note that the public agencies spent both the GoB and PA outlays at the same rate of 24 per cent during the H1 of the last FY2021. But, in the same period this FY2022, the project aid-spending rate was 3.0 percentage points lower than the GoB-funded ones," says the ERD official.
The PC official says the public agencies have sought Tk 1.62 trillion in the upcoming RADP, Tk 247 billion higher than the current Tk 1.37-trillion outlay, from government's internal resources.
However, they had sought even less than Tk 700 billion as the PA for the upcoming ADP, more than 20 per cent lower than the current allocation of Tk 880.24 billion, he adds.
"But the government had decided not allocate more than the current Tk1.37 trillion allocation from government resources and gave the green signal to cut the PA by 8.0 per cent from the present outlay," he told the FE, requesting anonymity.
Meanwhile, the local-government sector has sought higher Tk 436.75 billion out of the total Tk 1.62-trillion requirements in the upcoming RADP.
The transport sector has sought second-highest Tk 323.69 billion and the power and energy sector the third-highest Tk 247.08 billion for the next RADP.
"But we are working on their demands. We have to slash down some of their demands for keeping the current amount of Tk 1.37-trillion outlay in the next RADP, too," the PC official said.
In the last FY2021, the planning commission finalised the RADP trimming down the allocations by Tk 75 billion to Tk 1.97 trillion from Tk 2.05 billion.
In the previous FY2020, the government had revised the ADP outlay to Tk1.93 trillion from Tk2.02-trillion original outlay.
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