ADP spending rebounds after pandemic pause

ADP spending rebounds after pandemic pause
Development spending rose 16 % year-on-year to Tk 8,950 crore in September in a reassuring development for the federal government desperately trying to provide a leg-up to the economy reeling from the coronavirus pandemic.

This is the first positive growth since March this season as the expenditure from the total annual development programme (ADP) dipped on a monthly basis since then compared to a year ago as a result of the crisis, data from the Implementation Monitoring and Evaluation Division (IMED) showed.

ADP outlay in September this past year was Tk 7,717 crore.

Greater usage of foreign aid regardless of the government's halt on the release of the funds against the low priority projects drove the growth last month.

Between July and September, the ministries and divisions spent Tk 17,301 crore, which was 0.25 percent down in the same period this past year.

The spending in the first quarter was 8.06 percent of the Tk 214,611 crore set aside for the existing ADP. The expenditure in July and August was 3.89 % of the full total development budget and it was 1.52 % in July.

The utilization of foreign aid rose a lot more than 62 % to Tk 3,205 crore in September from Tk 1,976 crore in the same month this past year.

Spending from the government's coffer edged up slightly to Tk 5,500 crore from Tk 5,459 crore in September this past year.

In the first quarter, foreign aid spending was Tk 5,458 crore, which is 30 % greater than the same period last fiscal year.

The outlay was 7.74 % of the full total foreign aid budget. It was 5.89 % of the allocation designed for the same segment within the last fiscal year.

Of the total ADP this season, the government's contribution accounts for Tk 134,643 crore. Of the sum, 8.37 % was spent in the first three months. The implementation rate was 9.6 percent a year ago.

Despite the pandemic and natural disasters such as floods, the project implementation has been good, said a planning ministry official.

The ADP implementation's go back to positive territory came regardless of the government's restriction on the disbursement of funds for the low-priority projects since July. The move has been targeted at freeing up funds for the productive sectors amid widening revenue shortfall due to the devastating impacts of the pandemic.

Recently, the finance ministry has softened its stance bowing right down to pressures from the line ministries and in addition as a result of the improvement in income collection.

Now, 25 percent of the allocation from the ADP would remain halted for the ministries as a result of the lingering pandemic, down from 30 percent previously.

Of the 15 large ministries and divisions, which received 81.16 % of the allocation this fiscal year, four spent greater than the average.

The primary and mass education ministry achieved 14.35 % of the implementation target, accompanied by the energy division with 12.81 percent of its allocation.

The street transport and highway division spent 8.74 % of its allocation and the industries ministry 9.67 percent.

The other 11 ministries and divisions' implementation rate is low.

For instance, several mega projects are being implemented under the bridges division nonetheless it was able to spend only 7.12 percent of the allocation in the first quarter.

The budget for the health service division has been increased to permit it to tackle the crisis however the ministry too could spend only 4.31 % of the funds it received.

The science and technology ministry, which is implementing the Rooppur nuclear power project, spent 4.69 %, the neighborhood government division 6.74 %, the railway's ministry 7.02 %, the housing and public works ministry 4.75 %, the water resources ministry 6.27 percent, the shipping ministry 1.02 percent, the civil aviation and tourism ministry 3.73 %, and the Prime Minister's Office 5.42 percent.

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