The Planning Commission has proposed to cut 18.79% of the allocation to the health sector in its draft revised annual development programme (ADP) as the crucial sector failed to spend the money substantially in development project implementation in the first half of the current fiscal year (FY2021-22).
The projects under the Health Services Division of the Ministry of Health and Family Welfare could spend only 9.84% of the money allocated for the division during the first half, while the rest projects under the Medical Education and Family Welfare Division spent 22%.
The original development budget for the ministry was Tk17,307 crore for the fiscal year. It was one of the highest ADP allocation recipients amid the pandemic.
Planning Commission officials said the health sector, out of 15 sectors, would see the highest cut in development allocation. Besides, the development budget was proposed to cut 14% for power and energy, 10% for education, and 9.42% for transport and communication.
The draft revised ADP also suggested below 10% cuts in allocations for other sectors, including agriculture.
Khandker Ahsan Hossain, chief of the programming division at the Planning Commission said, said the draft of the revised ADP was prepared with an analysis of the demands of the ministries and divisions, implementation rates of their development projects, and the availability of the funds.
The draft would be finalised in the National Economic Council's meeting, slated for March, with Prime Minister Sheikh Hasina in the chair, he told The Business Standard.
Economists believe the lack of capabilities of the ministries concerned is responsible for the failure of timely implementation of the development projects.
"Development allocations for the sectors which are crucial for combating the Covid-19 pandemic and reviving economy are not increasing, which is very disappointing," said Dr Ahsan H Mansur, executive director at the Policy Research Institute.
"The health sector that received the highest ADP allocation spent the lowest. This is the absolute failure of our ministries and divisions. They failed to increase capabilities in 50 years of independence," he told TBS.
Prof Sayema Haque Bidisha, research director of the South Asian Network on Economic Modelling, said the health sector usually received low allocations for development.
"On the other hand, it fails to utilise the allocated money."
Echoing Mansur, the economist also said those involved in the implementation of the health sector development projects had a lack of capability.
Here is a vicious cycle, she believed. "The health and education sectors cannot utilise the allocated money, which is why the government cannot largely increase the allocations."
She called for a major overhaul in the system so that the sectors could come out of the cycle.
Planning Commission officials said the government fund – Tk137,300 crore – was kept unchanged in the revised budget, while foreign aid was proposed to decrease substantially.
In the draft revised ADP, the foreign funds are proposed to be cut to Tk17,774 crore from the original Tk88,024 crore.
The officials said the implementing agencies showed low interest in the projects funded by foreign development partners thanks to different terms and conditions. On the other hand, the agencies were keen on public-funded projects, which was reflected in the draft revised ADP.