Govt ADP part trimmed by only Tk 7 lakh despite cost-cutting measures
The allocation to the revised annual development programme may trim by only Tk 7 lakh although the government had made a decision to put low-priority assignments on hold in the beginning of the fiscal year due to coronavirus pandemic.
In the initial ADP, the federal government fund was Tk 134,643.07 crore for the fiscal year of 2020-21. The revised allocation could see it land to Tk 134,643 crore.
The planning ministry will propose the revised ADP at the meeting of the National Economic Council (NEC) today.
In July, the government put a hold on the implementation of government funded low-priority jobs involving Tk 40,000 crore within its cost-cutting proceed to release funds for the profitable sectors amid widening revenue shortfall caused by the devastating impacts of the pandemic.
The projects under the health and agriculture sectors, the two most priority areas for the federal government, were spared from the cost-cutting move.
Later the money ministry steadily softened its stance on the disbursement of cash for the low-priority projects bowing down to the pressures from the series ministries and also due to improvement in revenue collection.
The government in addition has allowed the line ministries to reprioritise the project list.
The government has halted the discharge of 25 per cent of the fund for the low-priority projects, meaning ministries and divisions can spend 75 % of the allocation.
A senior official of the finance ministry said they are actually emphasising on increasing expenses of the government fund to give a raise to the market.
Following approval of the revised ADP, the financing ministry will point the ministries to invest 10 % more from the government allocation, said the official.
As a result, the local finance of the ministries wouldn't normally be trimmed much.
The official of the planning ministry said although ministries and divisions send returning funds from the international portion of the tasks, they can be unwilling to cut back on the spending from their state portion.
Even after being directed, the ministries cut expenses well worth only Tk 10,000 to Tk 50,000 from the local portion, the state said. Because of this, the look ministry were able to trim down the federal government part of the ADP by only Tk 7 lakh in the modified ADP.
Inside the NEC get together today, the look ministry will propose to slash the development budget by 3.26 %, or Tk 7,501.79 crore.
The size of the revised ADP would be Tk 197,643 crore, that was Tk 205,144.79 crore in the initial budget.
The usage of foreign funds would trim by 10.64 % to Tk 63,000 crore from Tk 70,501.72 crore.
Although ministries were unwilling to slice the expenses of the local portion, the implementation of the ADP has been slow within the last seven months.
Ministries and divisions spent Tk 61,048 crore in the July-January period, which is the cheapest in the last five years, according to the Implementation Monitoring and Analysis Division.
Expenditure from the state coffer dropped 16 per cent to Tk 39,342 crore. Spending from the foreign part of the ADP dropped marginally.
