The government has proposed a massive Annual Development Programme (ADP) of Tk3 lakh crore for the 2026-27 fiscal year, despite persistent questions regarding the capacity to implement such a large-scale budget.
This marks an unprecedented 50 per cent increase – amounting to Tk1 lakh crore – within a single year, a jump never before seen in the country’s history.
In contrast, the implementation rate remains sluggish, with only 36 per cent of the Tk2 lakh crore revised ADP utilised during the first nine months of the current fiscal year.
Dhaka University’s Department of Economics Prof Shahadat Siddique told TIMES of Bangladesh that project implementation is plagued by the dual problems of cost escalations and time overruns.
He noted that a project that could be completed for Tk1 lakh crore often ends up costing as much as Tk1.70 lakh crore in reality. According to Prof Siddique, this situation not only indicates financial waste but also raises serious concerns regarding the efficacy of development spending.
Funding, development objectives
This massive development budget aims to accelerate infrastructure development, job creation, and economic growth.
According to budget documents obtained by TIMES, a significant portion of the Tk3 lakh crore ADP will be financed through domestic and foreign loans, as well as grants.
Specifically, Tk1,46,158 crore is expected from domestic sources, which includes a net bank borrowing target of Tk1,12,000 crore. Meanwhile, Tk1,53,841 crore is slated to come from foreign sources, including Tk1,10,000 crore in project loans and grants.
Economists argued that while these figures are impressive, the primary concern remains how effectively this money can be spent.
Recent data however is not encouraging, as expenditure during the first nine months of the current fiscal year stood at Tk75,607.24 crore, down from Tk82,894.08 crore during the same period previous year.
This represents not only a lower rate of implementation, but a decrease in the actual amount of money spent.
Administrative slowdowns, the process of changing government, and political transitions have hindered the momentum of development projects, resulting in the lowest July-March ADP implementation seen in five years.
Prof Siddique emphasised that ensuring the quality and accountability of project implementation is more vital than simply increasing the size of the ADP.
He identified inefficiency and corruption as the biggest challenges, noting that development projects are areas where the risk of wasting public money is highest.
He argued that if the government can reduce corruption, waste, and inefficiency, more development work can be achieved with the same amount of money without the need to merely expand the budget.
Private sector concerns, efficiency
While public investment is significant, the private sector remains the primary driver of growth in Bangladesh, contributing nearly four-fifths of the GDP compared to the public sector’s one-fifth.
Prof Siddique warned that if the expanded ADP leads to a proportional loss in private sector investment, the economy could face more harm than gain.
He concluded that rather than focusing solely on increasing spending, the government must prioritise project selection, timely execution, cost control, and result-based evaluation.
The trend of projects failing to meet deadlines and undergoing multiple cost revisions has historically placed immense pressure on public finances and delayed the delivery of expected benefits to the public.
