POPULISM and hard economics may not go together but a new government has difficulty drawing a line between the two. And, when it comes to adopting an Annual Development Programme (ADP), the distinction is likely to get even more blurred. The ADP formulation offering the first opportunity for a new incumbent to make an impression with the people, the former cannot check the temptation of grandstanding on it. In the process, it is likely to live in a make-believe world until the calculations get crossed at the end of the day to awaken it to reality.

The prognosis might hold good about the Tk 19,200 crore Annual Development Programme for the next fiscal year, okayed by the Executive Committee of the National Economic Council at its meeting chaired by Begum Zia on Tuesday. This ADP outstrips the one for the outgoing fiscal by Tk 3,200 crore reflecting a 20 per cent increase in size. Even allowing for 8-10 per cent upward adjustment necessitated by inflation and foreign exchange depreciation, according to the finance minister, how is he to explain the remainder 10 per cent increase in the ADP size, more precisely, garner the resource for it?

The projected highest ever 55 per cent contribution of internal resource to the ADP is good augury in terms of self-financing development provided it is principally based on revenue collection rather than domestic borrowing. The government is likely to announce a surplus revenue budget apparently catering to the counterpart financing requirements, so that, on paper, the need for domestic borrowing would seem discounted. Already, a 20 per cent increase in revenue collection has been claimed, although there are reservations about such a high figure.

Yes, our internal and external debt repayments are 21 per cent of our annual revenue expenditure, which is less than what India, Pakistan, Brazil, and Nigeria expend on such accounts. But whereas our external indebtedness is well within control -- thanks largely to grants -- our domestic borrowing is being 'unsustainable', according to World Bank readings. Let the government not make it more untenable by recourse to further bank lending.

The best ADP strategy we can think of has to have two components: selection of projects based on purely economic considerations; and existence of a well-coordinated and decentralised mechanism for implementation of such projects.