The government has decided to move away from austerity measures and spend more on Annual Development Programme (ADP).
Ministries will be able to spend 85% of the allocations for projects approved in the revised ADP of the ongoing fiscal year, according to a circular issued by the Finance Division on Sunday. Earlier, ministries were allowed to spend 75% of the allocated funds.
The disbursement of the funds will not require permission of the Finance Division or the ministries concerned. But the Finance Division in a letter asked the Comptroller and Auditor General of Bangladesh not to accept bills exceeding 85% of the funds allocated.
A top official of the finance ministry told The Business Standard that directives were usually given in April as to how much of the government allocations could be spent. Since the implementation of ADP is slow amid the pandemic, the government made the decision a month earlier.
In the last seven months of the fiscal 2020-21, only 28.4% of the ADP allocations have been used up.
Since foreign assistance is low, the amount of ADP reduced in the revised development budget resulted from reduced foreign assistance. The government allocations have remained unchanged.
The situation is improving now. If the trend continues, it will create scope of 100% usage of the government funds.
At the beginning of the fiscal year, revenue was expected to be less due to the coronavirus. The government took measures to curb public expenditure to bear the cost of vaccination and other measures to deal with the pandemic.
As part of the move, funds were available only for priority projects.
Besides, the government cut spending on different aspects, including purchasing vehicles and foreign tours.