REJAUL KARIM BYRON and MD ASADUZ ZAMAN

The government plans to increase its development spending slightly in the upcoming fiscal year due to the narrow fiscal space, the dollar crisis, the conditions attached to the IMF’s loan programme, and higher expenses on subsidies and interest payments.

The government is going to unveil a Tk 263,000 crore annual development programme (ADP) for 2023-24, beginning on July 1, an increase of 6.8 per cent from the original allocation in the current fiscal year of 2022-23.

If the funds to be set aside for the state-owned enterprises are included, the size of the development budget will be Tk 274,000 crore, which is 7 per cent bigger than the current ADP.

Last week, the planning commission, at a meeting chaired by state minister for planning Prof Shamsul Alam, finalised the proposed ADP. It may be placed at the next meeting of the National Economic Council on May 11 for final approval.

Prime Minister Sheikh Hasina is expected to chair the meeting, said a top official of the planning commission.

Except for the pandemic-hit 2020-21, the ADP size has seen an increase of at least 9 per cent in every financial year from the preceding year.

In FY21, the size of the ADP rose 1.19 per cent to Tk 205,145 crore. But if the development budget for the SoEs was taken into account, the ADP stood at Tk 214,611 crore in FY21, down from Tk 215,113 crore in FY20, the first decline in terms of allocation in the country’s history.

Although the general election is due early next year, the government has refrained from setting a higher spending goal mainly for lower-than-expected revenue generation, the dollar crisis, and the condition of keeping the primary deficit at 3 per cent of GDP attached to the loan programme of the International Monetary Fund and initiating expenditure-control measures, among other factors.