The Awami League-led grand alliance government is preparing a huge annual development programme (ADP) of Tk 30,500 crore in the first year of assuming power to implement its election pledges.
If finalised, the ADP for fiscal 2009-10 would be 20 per cent bigger than the current fiscal year’s (FY) original ADP and 32 per cent larger than the probable revised ADP.
The ADP size in the current FY (2008-‘9) is Tk 25,600 crore. It will be revised and brought down to Tk 23,000 crore.
Economists pointed out that statistics of ADP implementation in the last 10 to 15 years show that the government could never implement ADP of over Tk 200 billion. So, if a big ADP is taken up, the government would not be able to implement it, and there would be more possibility of wastage of public money.
Finance and planning ministry sources said the ADP for FY ’10 has been primarily estimated to be of Tk 30,500 crore but it might be bigger.
The finance minister has already said the size of the national budget for the next FY would be very big.
Planning ministry sources mentioned that since the political government came to power after two years of caretaker government rule, various demands are pouring in from different parliamentary constituencies across the country.
Following the upazila elections, the local government bodies are also seeking allocation of funds. As a result, the ADP size will be big this time.
According to statistics of last 13 years, except in fiscal 2000-01, original ADP allocations every year were cut during revision. Again, 80 to 96 per cent of each revised ADP could be implemented.
Only in 2000-01, the original ADP allocation of Tk 17,500 crore was increased to Tk 18,200 crore in the revised ADP. But the implementation in terms of money involved only Tk 16, 240 crore or 89 per cent of the revised allocation.
Till date, the highest ADP implementation in terms of money was in fiscal 2005-06 — Tk 19,473 crore. The original allocation was Tk 24,500 crore, and it was revised to Tk 21,500 crore.
In the last fiscal year, Tk 26,500 ADP allocation was revised to Tk 22,500 crore but implementation involved Tk 18,300 crore only.
In the current FY, for the first time the ADP was downsized to Tk 25,600 crore from the previous year’s original ADP. But in the first eight months, only 34 per cent of the original ADP was implemented, involving Tk 8,809 crore.
BIDS (Bangladesh Institute of Development Studies) research director Zaid Bakht said, “As I have seen in the last eight years, a maximum of 77 per cent of the original ADP could be implemented. However, in the present context, public investment is required for making the economy vibrant.”
If public investment increases, employment generation would get a boost go up creating increased demands in the economy, he said. But the problem is that only increasing the ADP size would not work, its implementation is important.
Zaid further said if the ADP cannot be implemented properly, there remains a possibility of wastage of government funds. So, ADP allocation should not cross Tk 25,000 crore. If the ADP size is of Tk 25,000 crore, the government is likely to be able to utilise Tk 22,000 crore to Tk 23,000 crore in implementing it.
World Bank (WB) senior economist Zahid Hossain said a hugely expanded ADP size this year would be justified since it is consistent with the country’s investment priorities: power generation, rural and urban infrastructure and basic education.
The government needs to provide some fiscal space to face the impact of global financial crisis. But it is too early to make specific financial commitments for particular packages at this stage. “To maintain fiscal flexibility, in my view, the ADP size should not exceed Tk 250-260 billion,” he said.
The WB economist said the problems in ADP implementation seen for long are include delay in getting land, taking long time in project preparation and approval, lack of experienced staff, court cases concerning many projects and delay in release of funds.
“I don’t think these problems can be resolved in a year. Without addressing these, increasing the ADP size would not produce any positive result,” he said.
Source: The Daily Star, 12 April 2009