ADP implementation fell to a seven-year low of 12.64 percent in the first four months, mainly due to the government’s austerity measures to address the effects of the Ukraine war.
During the July-October period of the financial year 2021-22, the ADP implementing agencies were able to post a higher execution rate of 13.06 per cent. In the 2015-16 financial year, the rate was lower at 11.48 per cent, according to IMED data.
However, overall ADP expenditure increased by Tk 14.40 billion, or 4.66 percent, to Tk 323.59 billion year-on-year, driven by better foreign resource utilization from Tk 309.19 billion a year earlier.
The shortfall in local money expenditure from ADP outlays actually made the overall ADP performance dismal in the July-October period, suggests the latest IMED data.
In the wake of the start of the Russia-Ukraine war, which dealt a new blow to the global economy after the Corona pandemic, the Bangladesh government resorted to austerity measures and tightened its grip on local ADP money spending from July this fiscal year to avoid deepening economic crisis. can be avoided. Economic Crisis.
There has been a decline in local resource utilization both in terms of share of allocation and volume of expenditure as compared to the corresponding period of the previous financial year.
Local money spending also fell to a seven-year low of 12.21 per cent in the July-October period of current FY23, after hitting 11.48 per cent in FY2016. A year ago it was 14.24 per cent.
The amount of expenditure from the local resources section of the ADP declined to Tk 181.90 billion from Tk 195.49 billion during the same period a year ago.
“The world economy has now entered a new crisis because of the Russia-Ukraine war. Bangladesh’s economy also felt its impact,” said Planning Minister MA Mannan.
“We are not focusing on less important projects because of the austerity measures. ADP spend for this has been lower. But you will see that the execution rate will eventually exceed 90 percent.”
On the other hand, foreign-funded project execution climbed to Tk 132.77 billion, or 14.43 percent, in the first four months, the highest in eight years. This is being seen as a good sign for the economy.
During the same period a year ago, the Project Assistance (PA) utilization rate was recorded at 11.20 percent or Tk 98.57 billion.
“In line with the government’s policy to save foreign exchange, some projects with provision for foreign imports are lagging behind. Besides, the implementation rate remains low as funds have not been disbursed though the project is progressing well,” said an IMED official, seeking anonymity.
The top 15 ADP implementing agencies, which received 82.67 per cent ADP funds in FY23, managed an average performance of 13.07 per cent with the Bridge Division posting the highest rate of around 37 per cent.
The PMO got 21.26 per cent, the power department 19.62 per cent, the railway ministry 15.84 per cent, the top allocated local body board 14.53 per cent, the agriculture ministry 13.35 per cent and the road transport and highways board 13.07 per cent. Among them, the shipping ministry could post the lowest rate of 4.54 per cent, while the health services division, which has been in focus since the onset of the pandemic, has been able to implement 6.08 per cent ADP.