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 project aid (PA) outlay to Tk 702.50 billion to Tk 880.24 billion and sent it to the Planning Commission (PC) for finalising the Revised ADP (RADP) for the current fiscal year, 2021-22.
"We have finalised the revised allocation at our end. We have also sent it to the PC for finalising the RADP. Now the PC will finalise the RADP for the current FY2022," a senior ERD official said Monday.
"Some large development budget-holders have sought lower foreign-aid funds than their current allocation in the upcoming RADP. So, we are forced to cut the total PA by 20.2 per cent," he adds.
He names transport, power, energy and rural-development sectors that have sought lower funds than their allocations, resulting in a lower outlay of the PA for the upcoming RADP.
According to the Implementation Monitoring and Evaluation Division (IMED), government ministries and divisions executed 24 per cent of the total Tk 2.37 trillion worth of ADP during the first half (July-December) of the current FY2022.
Despite massive pandemic onslaught on the economy in the last FY2021, the ministries and agencies also implemented 24 per cent of their ADP, similar to that in the H1 of the current fiscal.
Before the pandemic, in FY2018, in FY2019 and FY2020, the government agencies had performed better than the present and past two fiscal years with some 27 per cent or more H1 execution rate.
Another ERD official said the public agencies were showing better performance in implementing the government-funded projects rather than the project aid-funded ones.
"Since the development partners have the strict monitoring on the PA-supported projects, the implementing agencies prefer implementation of the GoB-funded projects. The GoB-funded projects usually have less monitoring than the PA-supported ones," he observes about one perceived decelerator.
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 3.00 percentage points lower than the GoB-funded ones," says the ERD official.
Meanwhile, the PC is working to revise the current Tk2.37 trillion ADP.
Commission sources say the ADP is likely to be downsized by 10 to 15 per cent as the larger development fund-holders have failed to execute their targeted works during the H1 of the current fiscal.
