Notwithstanding the poor rate of implementation of development projects by various government agencies and inadequate domestic resource mobilisation, the ministry of finance (MoF) and the planning commission (PC) have locked their horns over the issue of downsizing the annual development programme (ADP) for the current fiscal 2013-14.
The MoF is willing to reduce the size of the ADP to Tk 540 billion while the PC with the backing from the new minister for planning wants the ADP size to be around Tk 600 billion.
Both sides have reasons to stick to their guns. The MoF is opting for a cut in the ADP which has become more of a ritual followed annually in the case with country's public development expenditure. The poor rate of implementation of development projects and the shortfall in revenue mobilisation have been the two major reasons cited by the MoF for ADP downsizing.
Usually, the suggestions, made by the MoF that makes available funds for implementation of the ADP, prevail over those of others placed before the national economic council (NEC).
This time the PC has decided to make it a point that there should not be any cut in the original allocation of the ADP since the number of unapproved projects in the current ADP is quite high.
It feels that making available some resources to these projects, along with the approved ones, is necessary. The other point the commission has raised relates to the negative impact of ADP downsizing on employment situation and growth performance of the national economy.
An extended meeting was held at the PC last Monday to resolve the disagreement between the two sides over the size of this fiscal's ADP. The finance secretary was also present at the meeting, which, however, could not produce any agreement.
Planning Minister AHM Mustafa Kamal feels that the revised ADP (RADP) having a minimum allocation of Tk 600 billion is very much implementable.
It now seems that the fate of the revised ADP would be finally decided by none other than the Prime Minister.
However, the position taken by the MoF does otherwise appear to be logical. It wants to trim the ADP in the light of the actual utilisation of resources allocated for development projects. With an average implementation rate of 31 per cent by the 10 ten top ministries/divisions during first seven months of the current fiscal, the cut in allocation proposed by the MoF, thus, seems to be rational, particularly when the government's resource position remains tight. Furthermore, any quantum leap in implementation capacity of major spending ministries as far as the ADP is concerned, is a pipe-dream only, given the current state of performance of the country's development administration.
It is almost likely that the rate of implementation at the end of fiscal would go up to 90 per cent. The super speed in project execution, witnessed during the final months of a fiscal year, remains still a mystery. None has ever tried to explore it. But the breaking of the mystery could have possibly revealed a few bitter truths in the government's spending on development activities.
If the PC does have any worry over development spending, it should obviously be about the pace of implementation of the approved projects in important sectors such as agriculture, communications, power, education and health. Unapproved projects should certainty be not its priority at this stage, under the given circumstances about the resource envelope.
A large number of unapproved projects are usually spent, more under political consideration than on the basics of a sound economic rationale, by different ministries to the PC for inclusion in the ADP. The commission, reportedly, comes under intense pressure to allocate funds for those projects. The frequency of sending such projects to the commission has increased substantially in recent years.
The practice of despatching unapproved projects and their inclusion in the ADP has given rise to an unhealthy situation in the overall development administration of the country. This also runs afoul of the needs for maintenance of proper budgetary discipline and effective management of public resources. Unfortunately, instead of discouraging such a practice, attempts are there to encourage the same by individuals who matter in the administration.
Overall the country's development administration, in terms of quality and output of projects, has not progressed much in an unbroken chain with the past. Graft and other irregularities are still rampant. A large part of allocations, made to public sector development projects every year, is either wasted or misappropriated. Had the projects been planned and executed with a little bit of care and devotion, the people would have got far more benefits.
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