The government is upbeat about pumping more foreign aids into next fiscal’s annual development plan though the progress in aid-funded projects has so far been low in the current 2016-17 fiscal.
The Economic Relations Division (ERD) has already sent a massive Tk 57,000 crore final estimate for project assistance for 2017-18 fiscal's ADP to the Planning Commission, sources said.
The proposed share of project aids in new ADP is Tk 21,203 crore or nearly 60 percent higher than Tk 35,797 crore PA in current fiscal’s revised ADP that saw a deep cut in the share of foreign assistance from development partners.
In the current fiscal, the actual PA allocation was Tk 6,637 crore or 22.76 percent higher than last fiscal’s Tk 29,160 crore.
This year's original PA allocation was Tk 40,000 crore, but the PA outlay was slashed to Tk 33,000 crore in the revised ADP amid a severe disruption in aided project implementation following the Gulshan attack on the very first day of FY 17.
Later, the Planning Commission finalised the PA size in FY17’s RADP at Tk 35,797 core after bringing some necessary adjustment to it.
Meanwhile, project aid utilisation rate hit a five-year low at 41.81 percent during July-March period this year, much down from 47.45 percent posted in the same period a year earlier.
In the previous three fiscal years, first nine months’ aided project implementation rates were 45 percent, 47 percent and 49 percent respectively.
The terror attack at a resultant in Gulshan spread a wave of panic among foreigners, including those involved in aided projects. The government had to put hectic efforts in bringing back normalcy in the projects being implemented with foreign funds.
Economic analysts termed the projected aid size in new ADP ‘ambitious,’ given the current PA utilisation trends and execution capacity of implementing agencies.
“Increased PA allocation without enhancing the execution capacity will not pay off in boosting ADP,” they said, putting more emphasis on increasing the capacity to kick-start some mega projects in the next fiscal.
However, the ERD high-ups did not agree with the suggestion that the PA estimate was too ambitious this year, arguing that the projection was aligned with the aid pipeline.
“Currently, the government is fetching $12 to 14 billion fund commitment every year, which should be reflected in ADP allocation.So, the estimate can not be said ambitious,” said an ERD high official.
Besides, some mega projects will start in the next fiscal year, which will also require increased PA allocation, he added.
The Power Division will see the highest PA allocation of Tk 9,345 crore followed by science and technology ministry's Tk 8,275 crore, roads and highways department’s Tk 7,655 crore, railways ministry’s Tk 7,645 crore and local government division’s Tk 7,602 crore.
Besides, health and family welfare ministry will get Tk 3,315 crore from foreign sources, ICT division Tk 2,528 crore, bridges division Tk 1,008 crore, secondary and higher secondary education division Tk 1,058 crore, water resources ministry Tk 1,095 crore and agriculture ministry Tk 441 crore, among others.