The government is likely to earmark more than Tk 600 billion as project aid in the development budget for the next financial year (FY) 2018-19, up 16 per cent from the outlay for the current FY, officials said Friday.
In the current national budget, the authorities allocated Tk 520.50 billion in project aid to be provided from overseas assistance in the revised Annual Development Programme (ADP) of the current fiscal year.
Additional secretary of the Economic Relations Division Farida Nasreen said the agency had drafted documents explaining the project aid coming from various external sources for development projects during the upcoming financial year.
"We've already sent the external resources allocations to the Planning Commission for finalising the ADP for the next fiscal year. Now the PC will prepare the ADP incorporating the funds from the international sources and from our own resources," she told the FE.
"Prior to making the document on project aid availability, we've consulted with all the government ministries and agencies on their requirement for implementing the projects in the next year's ADP," she said.
The commission has been working for the last couple of months to finalise the ADP for the next fiscal, incorporating the project aid along with the government's own resources into the upcoming development budget.
Project aid is made available by different bilateral and multilateral development partners for executing development project aimed at improving infrastructure and reducing poverty.
The World Bank, the Asian Development Bank, Japan, China, India and Islamic Development Bank (IDB) are Bangladesh's major project aid providers.
When asked about the lower growth in the potential aid allocations in the next ADP, Ms Nasreen said, "We've prepared a realistic foreign aid budged for the next fiscal as it is an election year. The government agencies were very cautious about demanding the necessary funds for executing their projects next year."
In the current fiscal, the government framed a Tk 1.64 trillion original ADP, where it allocated Tk 604.16 billion worth of funds, 51 per cent higher than those of the previous fiscal, as the project aid.
Later, in the third quarter of this fiscal year, it slashed the allocations by 16.5 per cent to Tk 505.20 billion in the revised ADP from the original Tk604.16 billion outlay.
The ministry of finance and the Planning Commission are working on framing the national budget for the upcoming fiscal year, where ADP will be the important part.
Another ERD official said the poor project execution performance of the ministries and agencies in the current fiscal had prompted the division to become cautious about allocating the funds for the upcoming ADP.
In the first eight months (July-February) of the current fiscal, the government agencies spent only 42 per cent of the total outlay channelled into the current year's ADP.
[email protected]
