Govt to Cut ‘Politically Motivated’ Projects, Shrinking Budget

The interim government, which assumed power on August 8 following the student-led mass uprising, has focused on cutting what it considers "unessential" projects to prevent wasteful spending. According to sources from the Planning Ministry, the Executive Committee of the National Economic Council (ECNEC) concluded that several projects initiated under the previous Awami League government had not delivered adequate results relative to their costs.

Planning Adviser Dr. Wahiduddin Mahmud recently confirmed in a media briefing that the development budget for the upcoming year would be smaller compared to previous years. The first four months of the current fiscal year saw a notably low implementation rate of just 8%, a trend that also applies to foreign-funded projects.

Data from the Planning Commission shows that government-funded projects had an implementation rate of only 12-13%. The pace of government development programs has been sluggish, with the Annual Development Programme (ADP) posting one of its lowest execution rates in the past five years. From July to October 2024, the ADP recorded an implementation rate of only 8%, down from 11.54% during the same period in 2023. During this time, Tk 21,978 crore in development projects were implemented.

The interim government, led by Dr. Yunus, decided to revise the development budget in its first ECNEC meeting. Dr. Mahmud stated that many of the projects inherited from the previous administration were politically motivated and unlikely to provide substantial returns. "These projects were not expected to yield positive results, so we have decided to cut them. While the development budget is typically revised downwards, this time the reduction will be more significant," he explained.

The slow pace of implementation has been further hampered by the departure of several project directors, creating challenges in continuing projects. The interim government is now focusing on more innovative and efficient projects, moving away from outdated and politically driven initiatives.

The Awami League government’s original ADP for 2024-25, which was approved by the National Economic Council (NEC), had a total outlay of Tk 265,000 crore. The transport and communication sector received the largest share, Tk 70,687.75 crore (26.67% of the allocation). The ADP also included Tk 13,288.91 crore for autonomous bodies and corporations.

The revised ADP for the new fiscal year will include 1,321 projects, including 1,133 investment projects, 21 survey projects, 87 technical assistance projects, and 80 projects from autonomous bodies and corporations, bringing the total size of the ADP to Tk 278,288.91 crore.