The allocations for health, education, and social protection - the key pillars of human-capital development - have been sharply reduced, by as much as 63 per cent, in the Revised Annual Development Programme (RADP) for the current fiscal year.
Amid an extensive downward revision, driven by constrained fiscal space and slow project execution, a handful of sectors, including science and ICT, general public services, and defence, are set to receive higher allocations, Planning Commission officials say.
They say the Programming Division circulated project-wise allocations of the proposed RADP among the commission's divisions on Tuesday for review.
Economists say while rationalisation was expected due to revenue constraints, the magnitude of cuts in health and higher education could weaken human capital development in the medium term.
Reduced investment in university research and medical infrastructure may slow innovation capacity and healthcare improvements - areas critical for long-term productivity.
Several large sectors will see significant cuts.
For instance, transport and communications, which traditionally commands the largest share of ADP, faces the deepest nominal reduction of Tk 203.48 billion.
The sector proposed receiving Tk 386.25 billion, 34.5 per cent lower than the original allocation of Tk 589.73 billion.
The reduction is expected to slow implementation across flagship infrastructure projects, including metro rail, expressways, railway modernisation, and major road expansions.
Project executing agencies have already been asked to prioritise essential work and defer non-urgent components.
The education sector has undergone a major contraction, with a cut of 34.77 per cent to Tk 186.28 billion, making it the second most-impacted sector after transport.
It is supposed to lose allocations of Tk 99.30 billion from the original amount of Tk 285.57 billion.
However, the cuts are unevenly distributed within the sector, with the Secondary and Higher Education Division - responsible for universities, colleges, and technical upgrades -
seeing a massive Tk 56.02 billion reduction (47 per cent).
The contraction could hinder university capacity development, digital classrooms, and research-focused initiatives, particularly at the tertiary level.
In contrast, the Ministry of Primary and Mass Education is one of the biggest winners in the RADP.
Its allocation jumps by 38.78 per cent - an increase of Tk 22.51 billion - and signals the government's attempt to prioritise foundational learning, early-grade literacy, and school infrastructure at the primary level.
Officials say the allocation for this sector is set to be increased as the government has approved a new mega project to ensure midday meals for primary school students.
The health sector, however, appears to take the hardest blow proportionally, with the allocation plummeting by 63.27 per cent to Tk 47.33 billion, raising concerns from public health analysts.
Within the sector, the Medical Education and Family Welfare Division sees a staggering 72 per cent cut, while the Health Services Division will have a reduction of 58.35 per cent.
Such deep reductions may stall hospital development, medical college infrastructure, and the procurement of medical equipment and recruitment-based components of health projects, say experts.
This comes at a time when public hospitals are struggling with rising patient pressure, non-communicable diseases, and persistent resource shortages.
Transport-focused agencies are among the hardest hit, with Dhaka Mass Transit Company Limited (DMTCL) - the implementing agency of metro rail projects - experiencing the most severe cut of all, a reduction of 78.92 per cent to Tk 24.17 billion.
The Road Transport and Highways Division loses Tk 118.23 billion, 7.21 per cent of the original allocation, which could delay works on several national highways and elevated corridors.
The allocation for the railways ministry is set to decline by 34.65 per cent.
"It is disappointing that allocations for health, education, and social protection have been reduced at a time when higher funding for these sectors is expected," says Dr Mustafa K Mujeri, former director general of the Bangladesh Institute of Development Studies.
He notes that increased spending in these sectors not only enhances human capital and boosts household income but also channels additional resources to the poor through ADP implementation.
In infrastructure, slower progress on road, rail, and urban transit could push back the deadlines for megaprojects, affecting transport efficiency and growth spillovers, say sector insiders. Reduced capital spending may also dampen the demand for construction materials and private sector engagement, they add.
The finance ministry earlier decided to formulate the FY26 RADP with Tk 2.0 trillion, after a cut of Tk 300 billion.
Of the total allocation, Tk 1.28 trillion will come from the government exchequer, while Tk 720 billion will be sourced as project aid in the form of loans and grants from development partners. At the beginning of the fiscal year, the National Economic Council approved a Tk 2.30 trillion ADP, including Tk 1.44 trillion from local resources and Tk 860 billion as project aid.
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