ADP implementation bleak

This is a record big ADP with Tk 24,500 crore outlay, and predictably so, in an election year undaunted by under-performance of the last ADP, Tk 17,000 crore is in local currency, the foreign aid component being the remainder Tk 7500 crore. Overall, 15 percent of the total outlay was spent between July and October as compared with 21 percent in the corresponding period of FY2005. There is a better showing on utilisation of foreign aid: 17 percent as against 20 percent in the last fiscal. Only 15 percent money was utilised of the locally financed projects in July-October period, down by six percentage points compared with last year. The slow pace of implementation can be explained in conventional terms by attributing it to lack of inter-ministerial coordination and the bureaucratic red-tape that goes with it. Sometimes this is habitual, and at times it is wilful, the latter impression being difficult to shrug off as the pressure builds on the last quarter to spend money in hot haste and haphazardly as if to skirt accountability.

Significantly, 51 of the 333 foreign-funded projects out of a project portfolio of 859 in all, which had awaited approval have been mostly okayed by December last year. In other words, approval-related complications are out of the way so that the deceleration of implementation should stop now. The big reason, however, for the halting pace of ADP utilisation is that the first quarter was taken up by the motions and mechanics of getting the procurement processes under way. This is a hugely important and sensitive exercise given the controversies it had run into earlier on which basically led to plugging the holes of pre-existing procurement policies.

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Bigger the size of an ADP, greater the chance of misuse of funds; and it's all the most so in an election year when there is a temptation of playing to the constituencies with project expenditure. The over-acceleration of the pace of implementation at the fag end of a financial year could mean larger borrowing from the banking system forcing the economy on a tumble which the government must do everything in its power and wisdom to avoid.