Health ministry fails to utilise even half of its dev outlay

SM Najmus Sakib | Published: July 08, 2026 22:59:43

Poor capacity, manpower shortages, and a lack of cooperation among government agencies have allegedly made the health ministry incapable of spending even half of its development budget for financial year (FY)'26.
The Health Services Division, the major spending wing belonging to the health minitry, could spend only 31.27 per cent of its Tk 31.16 billion development budget allocation in the 2025-26 fiscal year's revised budget, a senior ministry official associated with the health budget told The Financial Express on Tuesday.
The ministry spent an overall development budget allocation of about 36 per cent, while ministry officials said total spending in FY26 would not cross 50 per cent in the final calculation.
The total development budget for the health ministry for the just-concluded FY was Tk 350 billion.
Of this, about Tk 120 billion has already been committed to ongoing projects.
Delays in project planning, design, and approval could result in development funds remaining unspent, a recurring problem in the health sector.
The government earlier doubled the health budget for FY27 to Tk 694.09 billion, raising health expenditure to more than 1.0 per cent of the gross domestic product (GDP) for the first time.
Of the total allocation, Tk 350.26 billion has been earmarked for development expenditure and Tk 278.26 billion for operating expenditure.
Health economists and former health ministry officials blamed the poor situation in budget spending on capacity, particularly of the local authorities and offices related to budget planning and spending.
"There is insufficient skilled manpower from the top to the upazila level at the cost centres and facilities (hospitals, clinics) of the health ministry to plan and spend the budget money," said Prof Syed Abdul Hamid of Institute of Health Economics at University of Dhaka.
"The overall budget expenditure would not cross 50 per cent in FY26," he added.
The budget planning and design are a long-standing process.
The health ministry often takes much time in planning and design and then having those approved at the National Economic Council.
If the ministry fails to pass and spend the budget, including the development budget in the one-year time frame, the money is usually returned.
The government in FY27 mainly increased development and block budgets, which cannot be spent directly without taking on any project.
Funds from the new development budget will be spent a few months later as the national budget has just been passed in parliament.
Health expert Prof Dr Be-nazir Ahmed echoed the same.
The responsibility for most projects is traditionally given to senior officials who are close to their retirement. But they do not want to take the risk of expenditure as it is related to their pension after retirement, he said.
Furthermore, the appearance of audit objection in the expanding health budget remains a challenge, which health officials tend to avoid.
He suggested easing the process and arranging budget and finance management training, as well as removing the complexity in budget expenditure.
The health ministry needs strong and technical hands in the tender and procurement process, he said.
"Cooperation among government offices is crucial," he added.
He attributed the poor expenditure performance to weak budgetary planning, design, complexity in the budget spending, and the audit process.
Appreciating the increase in health budget, he expressed doubt about whether the full budgetary allocation would be spent this fiscal year.
"This year, the health budget will not be spent fully. The whole process of expanding is complex, slow, and bound to be conducted under incompa- tible manpower," he said.
The revised health budget of the 2025-26 FY is Tk 354.77 billion, down from the original Tk 419.08 billion.
The new fiscal year's Annual Development Programme (ADP) for health is Tk 355.30 billion, which was Tk 181.48 billion in FY26.
In FY26, a total of Tk 181.48 billion was allocated under the ADP, with over Tk 128.84 billion for the two divisions of the health ministry.
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