ADP with an eye on election!

Ideally, a government should like to break new grounds with the electorate beyond its own constituencies by placing economic interests of the country above partisan political considerations. But in reality, the government of the day tends to make compromises on what should have been an unalloyed holistic approach to development.

The just-announced ADP for fiscal 2005-2006 contains 516 new and unapproved projects among a total of 1440 development projects being taken up for implementation. The 'unapproved' segment of projects smacks of yielding to pressures of MPs and ministers for nurturing their constituencies keeping in view the next general election. Even assuming that all the remainder projects commend themselves on economic grounds, 516 projects are a big, undefined chunk anyway.

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The new ADP is ambitious at Tk 24,500 crore, judging by the 20 percent increase in outlay over the last year's revised development budget. But outside the ADP, a portfolio of 68 projects is envisioned under the revenue budget claiming a total allocation of Tk 790 crore. The net development expenditure next year is, therefore, estimated at Tk 25,290 crore.

It is not just being ambitious, it's unrealistic as well. In the nine months up to March, the ADP for fiscal 2004-2005 had been implemented up to 46 percent, although a lot of acceleration is claimed to have been achieved since that point in time. The problem with speeding up implementation is poor quality work shot through by corruption.

With a bigger ADP, the government will have to closely monitor and evaluate the use of allocations, especially related to award of contracts.

The local currency component of the ADP is put at 52 percent. There has been a six percent shortfall in revenue earning. Finance Minister Saifur Rahman has assured that no new tax will be imposed to finance the ADP and that additional resources will be garnered through better revenue collection. Let's hope, he succeeds in the mission.

The other option the government might be tempted to use is to borrow from the banks which like the eminent economists we would advise against in the best interest of macro-economic stability. The rising inflationary trend dictates controlled borrowing and stemming of any expenditure drift.