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Development spending still in slow lane

Spending speeds up in final quarter; it's a historical trend: minister

Star Business Report
Development spending increased 2 percentage points in the first five months of the fiscal year but it is still lagging behind the historical trend.
Between the months of July and November, the ministries and divisions put to use 19.13 percent of their total outlay for fiscal 2016-17, up from 17 percent they managed a year earlier.
Since fiscal 2012-13, the annual development programme spending in terms of percentage of the total outlay had been on the downslide.
In the first five months of fiscal 2012-13, the total ADP implementation was 25 percent, with the rate of implementation progressively declining since.
Planning Minister AHM Mustafa Kamal however at a briefing yesterday said the development spending in the first five months of the fiscal year in terms of amount was at an all-time high.
SomeTk 23,594 crore was spent during the July-November period, in contrast to Tk 17,011 crore a year earlier, according to statistics from the Implementation, Monitoring & Evaluation Division.
This year, the ADP outlay is Tk 123,346 crore, which includes the development allocation for state-owned enterprises.
Of the amount Tk 110,700 crore would come from the government budget.
Usually the ADP amount increases every year, but its performance is evaluated by calculating the rate of implementation in comparison with the total outlay.
And the latest implementation rate showed that the government would have to spend about 80 percent of the total outlay in the remaining seven months of the fiscal year.
Previous records also showed that 40-50 percent of the total ADP is implemented during the last quarter of a fiscal year.
"Development spending remains slow in the first three quarters of the fiscal year, accelerating only in the last quarter. It is a historical trend that has been going on since the independence of the country,” Kamal said.
The reason is that construction works take place all throughout the year but the payments are made at the end of the year.
"No payment is made without completion certificate of the contractors and this certificate is given during the end of the year."
Of the total spending in the first five months, the implementation rate of government's own fund was
28.86 percent, while the foreign fund utilisation was 16.68 percent and own fund from state-owned enterprise 17.2 percent.
Ten ministries and divisions got 73 percent of the total allocation, of which only four ministries and divisions spent higher than the average implementation rate.
The ministries are: railways ministry, primary and mass education ministry, power division and local government division.
The housing and public works ministry, education ministry, bridges division, road transport and highways division, health ministry, and water resources ministry spent much lower than the average.
At yesterday's press briefing, the planning minister also said the government has approved 101 projects in the first six months of the fiscal year, whose estimated cost is Tk 227,820 crore.
Of the sum, the government would provide Tk 72,000 crore and the rest would come from foreign fund.
A year earlier, 104 projects were approved, involving a total of Tk 85,000 crore, Kamal said, adding that the jump in this year's project cost is due to the Rooppur nuclear power plant.
The Rooppur nuclear power plant project will cost about Tk 113,092 crore.