Development budget cut by Tk30,000 crore

Last Tuesday, Budget Wing–1 of the Finance Division instructed the Planning Commission to begin work on the source-wise allocation for the revised ADP for FY2025–26. Of the Tk200,000 crore allocation, Tk128,000 crore will come from government funds, while Tk72,000 crore will be sourced from foreign-funded loans and grants.

The Finance Division has asked for the final RADP to be prepared and submitted “as soon as possible.”

Ministries and divisions facing reduced foreign-aided project spending will also see cuts in their government allocations. Agencies with slow implementation records will lose funds, which will be redirected to priority projects.

The directive emphasized dropping less important projects in favour of those with greater significance or nearing completion. From 2–5 November, the Planning Commission held review meetings to assess foreign-funded projects and determine loan and grant allocations for the RADP.

Based on these assessments, the revised development budget size was finalised. For the first time, the government aims to complete the RADP by December to ensure the budget structure is settled before the national election, helping prevent implementation delays during the election year.

In the original ADP, local funding stood at Tk144,000 crore, with Tk86,000 crore in foreign assistance.

The transport and communication sector received the highest allocation at Tk58,973 crore, or 25.64% of the total ADP. It was followed by power and energy (Tk32,392 crore), education (Tk28,557 crore), housing (Tk22,776 crore), and health (Tk18,148 crore).

At a recent ECNEC briefing, Planning Adviser Dr Wahiduddin Mahmud said, “Last year, for various reasons, many projects slowed down. This year, that excuse will not be acceptable. Ahead of the election, we want the RADP finalized on time so development activities can gain momentum.”