Covid mitigation projects to get priority in RADP

Ongoing projects undertaken to mitigate Covid-19 fallouts will be given special priority in the allocation of funds in the revised annual development plan (RADP) for the current fiscal year.

In approving new projects also, additional importance will be given to proposed projects aimed at dealing directly with the novel coronavirus and recovering the economy from the pandemic-induced damages.

Apart from this, the Planning Commission has prepared a guideline for the formulation of the RADP attaching priority to projects aimed at agriculture, agro-based industries, development of ICT education, poverty reduction, and mitigation of damages caused by natural disasters.

The guideline was sent to all ministries and divisions of the government as well as to the agencies involved in implementing projects under the ADP.

Asked, Planning Minister MA Mannan told The Business Standard that even though everything was closed during the pandemic-induced lockdown, two health projects aimed at tackling the novel coronavirus were approved under special arrangements. After that, every proposed project related to this health emergency got approval, the minister added.

"There is no sign of an immediate improvement in the coronavirus infection situation. In the future, it will be necessary to build the necessary infrastructure for vaccination. Considering all this, the government in the RADP will give special priority on projects related to the coronavirus," he continued.

According to the Planning Commission's guidelines, the ADP will be revised taking into account the country's macroeconomic situation, especially economic growth, inflation, investment demand, revenue collection, foreign aid, usability and spending trend.

Once the size of RADP is determined by the Finance Division of the Ministry of Finance, the allocation will be divided based on economic sector priorities, ongoing project demand, progress in project implementation, etc.

About financing ongoing projects, the guideline states that projects that can directly help tackle the coronavirus and alleviate poverty will be given priority in the RADP.

The planning commission in its guideline has asked the authorities concerned to cut allocations on sluggish projects and increase allocations on faster-moving ones. Apart from that, it has also suggested reducing allocations on slow projects to provide adequate funding for projects awaiting completion in the current financial year.

Considering the limitations of resources, the commission has suggested speeding up the implementation of ongoing projects without taking up new ones in the RADP.

It has also been suggested that projects for which the government has inked deals or memoranda of understanding with donor agencies on receiving foreign aid are included in the ADP.

In this regard, the planning minister said, "In all the countries of the world, there is an increased demand for expenditure against resources constraints. Our list of priorities is also long. However, the reality is that it is difficult to finance all projects according to demand. With this in mind, the allocation for slow and low priority projects will come down."

For several years, the ADP formulation guideline has been recommending the implementation of 30% of the total projects on public-private partnership (PPP) basis. In view of this, it has been suggested in the guideline for this year to propose projects that support the PPP model.

According to Planning Commission sources, an ADP of Tk2,14,611 crore was formulated for the current financial year. Of this, Tk1,34,643 crore has been allocated from the government's own fund and Tk9,466 crore from the implementing agencies' funds. The project aims to raise Tk70,502 crore from foreign sources as assistance.

According to the Implementation Monitoring and Evaluation Division (IMED), Tk38,472.77 crore was spent on ADP implementation in the first five months of the current financial year, which is 17.93%cent of the allocation.

Even though size of the ADP remains large initially, a large amount is usually deducted every year due to sloth in implementation.

Asked about this, Asadul Islam, senior secretary of the Planning Division, said allocations would be made for projects of the ministries as per the demand set by the finance ministry. He also hinted that the size of the RADP could be reduced due to the slow pace of implementation due to the revenue collection situation and the pandemic.

Zahid Hussain, former lead economist at the World Bank, said the government's priorities have changed due to the pandemic.

Priority projects could be in financial crisis, if the RADP is formulated only on the basis of implementation, he argued.

In this situation, additional allocations should be made for projects in health, social safety, rural infrastructure, education and economic recovery keeping in mind the coronavirus crisis.