Although the government had targeted to use Tk70,501.72 crore in foreign aid in the current fiscal year, the amount will fall to Tk63,000 crore in the revised ADP
The volume of foreign aid is going to witness a 10.64% drop in the revised annual development programme (ADP) for the fiscal 2020-21 because of slow progress in development spending.
Although the government had targeted to use Tk70,501.72 crore in foreign aid in the current fiscal year, the amount will fall to Tk63,000 crore in the revised ADP.
In FY20, foreign assistance in the revised ADP was slashed by 13.65% or Tk9,800 crore.
The allocation will drop the most for the Rooppur Nuclear Power Plant – by Tk4,960 crore.
The Dohazari-Cox's Bazar rail line and Shahjalal international airport expansion projects will see a drop of Tk5151 crore and Tk656.74 crore in their allocations respectively.
Sources said there is not much tendency to cut allocations for low priority projects.
After a series of meetings with the ministries and divisions concerned, the Economic Relations Division (ERD) set the new target of foreign loans for the current fiscal year. It sent the revised allocation proposal to the Planning Commission on Thursday.
Once the Finance Division finalises fund allocations, the revised ADP will be tabled at the National Economic Council for approval in February.
The ERD also proposed a hike in allocations for some projects. The Padma rail link and Matarbari coal-fired power plant projects will get more foreign allocations in the revised ADP, having good work progress even during the pandemic.
Among the government's fast-track projects, the allocation for Mass Rapid Transit Line-6 will remain unchanged at Tk3,780 crore.
Meanwhile, the ministries and divisions spent only Tk17,563 crore or 24.91% of foreign aid in the first six months of the current fiscal year, according to the Implementation Monitoring and Evaluation Division.
Khandaker Ahsan Hossain, chief of the Planning Commission, said the ERD has set foreign allocations in the revised ADP based on the needs of ministries and divisions. The revised ADP proposal has already been sent to the Planning Commission for approval.
There will not be much change in allocations for general ministries and divisions, he added.
Dr Fahmida Khatun, executive director at the Centre for Policy Dialogue, said if foreign aid allocation was spent as per plans from the very beginning of the current fiscal year, there would not be any need to cut the allocations in the middle of the year.
"If government investment can be enhanced in the Covid-battered economic situation, the private sector will also get momentum. So, if spending on projects under the ADP increases, the economy will make a turnaround. However, it will not be right to go for random spending in this case. We have to ensure quality work by spending public money," she added.