Govt funds raised in revised ADP

The government has increased the amount of its own funds to be spent on the annual development programme by about 10 percent as it has ample scope to borrow from the banking sector. 

In a meeting yesterday, the National Economic Council approved the revised ADP for 2016-17, keeping the original allocation of Tk 110,700 crore unchanged.

After the meeting, Planning Minister AHM Mustafa Kamal said the government's portion in the ADP spending went up by Tk 7,000 crore to stand at Tk 77,700 crore.

On the other hand, the share of foreign funds was slashed by Tk 7,000 crore or 17.5 percent to Tk 33,000 crore. According to an official, the planning ministry had proposed to raise the spending from domestic sources by Tk 500 crore but the prime minister increased the government's share equivalent to the cut in the funds from external sources.

At the meeting, Kamal said the implementation of the foreign-funded projects was hampered at the beginning of the fiscal year because of militant attacks. As a result, full implementation of the foreign-aided projects would not be possible.

A planning ministry official said the prime minister inquired about the government's borrowing from the banking system.

In reply, the finance secretary said the government has not borrowed any money from the banking sector, the meeting sources said.

The government has targeted to borrow Tk 38,938 crore from banks in the current fiscal year.

But in the first five months the government has not borrowed a single taka; rather it has repaid Tk 6,702 crore to service outstanding debt, according to Bangladesh Bank statistics.

This has created enough space for the government to put more local resources in the revised ADP.

At the meeting, Prime Minister Sheikh Hasina said the planning minister, after consultation with the finance minister, will allocate funds from the new resources taking into account a ministry's capacity to spend as well as its actual needs. According to planning ministry data, the unused foreign aid in the pipeline reached a new high of $36.54 billion till February 27.

On Monday, Kamal said the militant attack at a Gulshan café on the first day of the current fiscal year slowed the utilisation of the foreign-funded projects. Many foreigners, especially those who were involved in mega projects such as mass rapid transit and Padma bridge, had left the country after the July 1 attack. “They [the foreigners] have come back after the situation has improved. The work of the projects has resumed. So, the utilisation scenario will improve.”

The development allocation for the state enterprises has been slashed in the revised ADP. The planning ministry has earmarked Tk 8,595 crore for the public enterprises, which is 32 percent less than the original amount.