United News of Bangladesh

The newly formed government has taken a move to expedite the annual development rate (ADP) of the country to an expected level although two-thirds of the fiscal period has been gone under the interim government. Finance and Planning Minister Amir Khosru Mahmud Chowdhury gave the directive during his first meeting with senior officials of the ministry on his first day in office recently. Irked with the very poor annual development, the minister asked the top officials to find out effective and implementable ways to improve the ADP implementation rate, according to the meeting sources. ADP implementation rate at 5-year low The ADP is moving at one of its slowest paces in recent memory, with the first half of the 2025–26 fiscal year recording historically weak execution rates. Government data shows that only around one-fifth of the ADP allocation has been spent so far, underscoring persistent challenges in public project execution and raising questions about the country’s broader development trajectory. The ADP is the government’s main fiscal instrument for financing public sector development projects, covering infrastructure, health, education, agriculture and other priority sectors. It plays a central role in job creation, improving services, and boosting economic growth. But official figures from the Implementation Monitoring and Evaluation Division (IMED) show that by January in the current fiscal year, only about 21.18 percent of the ADP had been spent – marginally lower than the same period last year, when it stood at 21.52 percent. ADP implementation falls to 5-year low in first half of FY26 Mid-year implementation rates have typically lagged in past years, with early execution often below average, but the current figures are still well below what is needed to hit year-end targets. In fact, IMED data indicate that during July–December of FY26, just 17.54 percent of the original allocation was implemented, marking one of the weakest mid-year performances in recent years. Talking to the ministry officials, Amir Khosru said the rate in the last one and a half years is very much unsatisfactory. He asked the ministry officials and others to work with utmost sincerity to level up the rate for the sake of the country and its people, a planning ministry official who was present at the meeting told UNB. Experts and officials point to several factors behind the weak performance. Delays in procurement remain a central problem, with lengthy procedures slowing down the release of funds and the start of projects. Land acquisition issues continue to plague major infrastructure programmes, holding up work and tying up resources in legal and administrative processes. From the meeting, the officials pointed out that Shortages of experienced project directors and technical staff have also contributed to delays, particularly in sectors that require specialist management. In this regard, the minister asked them to find appropriate officials and project directors to engage on an emergency basis. He also said Prime Minister Tarique Rahman is very much serious about the issue as he wants to see a significant rise in the implementation rate, according to the meeting source. Political developments have added to these structural issues. After anti-government protests and administrative uncertainty in 2024, many contractors linked to the previous regime reportedly withdrew from ongoing work, leaving gaps in implementation that were slow to fill. The interim government also cut the ADP’s size by around Tk300 billion in the revised budget, reflecting tighter fiscal conditions that further constrained project spending. The health and education sectors have been particularly hard hit, with steep cuts in their revised allocations. Health spending, for example, was reduced by more than 70 percent, while secondary and higher education saw more than a 50 percent drop in funding. These cuts have compounded execution problems in sectors already struggling with administrative and logistical hurdles. The pattern is not confined to the current fiscal year. In FY2024–25, Bangladesh recorded its lowest ADP implementation rate in decades, with just 67.85 percent of the revised programme executed by June. That was a significant drop from the 80.63 percent implementation the year before and reflected the impact of political upheaval and policy reassessments on development work. Planning experts say that slow ADP execution has broader implications for the economy. When allocated funds are not spent on time, planned projects are delayed or scaled back, reducing the stimulus they provide to economic activity. It can also undermine investor confidence, as visible progress on infrastructure and social development projects tends to attract private investment. There are calls within policy circles for reforming project planning and execution mechanisms to make them more resilient. Streamlining procurement procedures, strengthening institutional capacity for project management, and ensuring continuity in leadership roles across administrations are among the measures proposed. Some economists argue that maintaining stability in project oversight and reducing mid-year budget revisions could also help smooth implementation. Government officials acknowledge the challenges but say there are efforts underway to improve performance. They point to modest improvements in some sectors and emphasise ongoing work to accelerate spending in the second half of the fiscal year. Still, critics argue that without addressing deeper structural and administrative weaknesses, progress will remain slow and inconsistent. For Bangladesh, improving the ADP implementation rate is not just a matter of bookkeeping. It is central to delivering on development priorities, improving public services, and sustaining economic growth in a period of global uncertainty and domestic pressures. As the fiscal year advances, attention will remain on whether the new government can translate their plans into visible results on the ground.