The First Budget to Fulfill Election Promises

The first budget aimed at fulfilling election promises is approaching. As part of this, an ambitious allocation is being made for the development program. For the upcoming 2026-27 fiscal year, Tk300,000 crore is being allocated under the Annual Development Program (ADP). Out of this, Tk190,000 crore, or 63.33 percent, will be provided from government funds, while Tk110,000 crore, or 36.67 percent, will be garnered from foreign sources. 

The original ADP for the current fiscal year was Tk238,695 crore. Compared to that, the allocation has increased by Tk61,305 crore. Midway through the fiscal year, the allocation was trimmed down to Tk208,935 crore in the revised ADP. By this calculation, the allocation for the next fiscal year will increase by Tk91,065 crore. However, the reality of ADP implementation shows a different picture. Experts say that in the current crisis situation, such an allocation is nothing short of ambitious.

The new ADP is set to be presented at the extended meeting of the Planning Commission on May 9. The meeting, to be held at the NEC Conference Room in Sher-e-Bangla Nagar, will be presided over by Finance and Planning Minister Amir Khosru Mahmud Chowdhury. Following this, it will be presented as soon as possible to the National Economic Council (NEC) meeting for final approval. Prime Minister and NEC Chairperson Tarique Rahman will preside over that meeting, according to relevant sources.

In this regard, Dr. Zahid Hussain, former Lead Economist of the World Bank's Dhaka office, told Agamir Somoy on Wednesday that such a large ADP is certainly ambitious. He noted that there are issues with funding on one hand and a lack of implementation capacity on the other. For instance, achieving the target set for foreign loan allocation will not be easy. Additionally, if the government borrows from the local market for the funds allocated from the government treasury, it will hinder credit availability for the private sector. Both financial and capacity issues are evident here. Even if funds are available, there is no benefit if there is no capacity for implementation, and vice versa.

The economist further remarked, where growth is weak and inflation is very high in the country, such a large ADP will create more problems. Our current problem is on the supply side; there is a lack of supply. Consequently, increasing demand by raising government investment will yield no benefit.

There is no gas in the country, there is a diesel crisis, and there are problems with fertilizer imports. Production is being hampered due to all these deficiencies. Increasing demand without solving structural problems will only trigger inflation, making the situation even more difficult.

Several responsible officials of the Planning Commission said the five sectors receiving the highest allocations under the ADP for the next fiscal year are Transport and Communication with Tk50,092 crore, Education with Tk47,591 crore, Health with Tk35,535 crore, Power and Energy with Tk32,691 crore, and Housing and Community Facilities with Tk20,361.72 crore, respectively. A total of Tk186,272 crore is going to be required by these five sectors, which accounts for 62.10 percent of the total proposed ADP.

Top 10 Ministries and Divisions Receiving Highest Allocations

Under the Local Government Division, Tk33,735 crore will be allocated. The Road Transport and Highways Division is receiving Tk30,741.36 crore. The Health Services Division is getting Tk26,806 crore. The Secondary and Higher Education Division is allocated Tk20,835 crore, while the Ministry of Primary and Mass Education is being provided with Tk19,440.58 crore.

Additionally, Tk17,403 crore is allocated to the Ministry of Science and Technology, Tk14,938 crore to the Power Division, Tk8,220 crore to the Medical Education and Family Welfare Division, Tk8,006 crore to the Ministry of Shipping, and Tk7,832 crore under the Ministry of Water Resources.

Former Planning Secretary Mamun-al-Rashid said, "Our main problem is the lack of capacity. For some reason, this is not being given enough attention. If there were skills and capacity for ADP implementation, this allocation would not have been much of a problem."

In his view, the biggest challenge in implementing a Tk300,000 crore ADP is sourcing the funds. In this case, just as the National Board of Revenue will face challenges, securing foreign loans will also be difficult.