Development Budget Set for Tk 30,000cr Cut

The interim government is preparing to downsize the current Annual Development Programme (ADP) by nearly 13 percent, equivalent to Tk 30,000 crore, due to its slow implementation progress, according to officials.

The revised ADP for the 2025–26 fiscal year is expected to be reduced to Tk 2,00,000 crore, down from the originally approved Tk 2,30,000 crore set by the National Economic Council (NEC) on May 18, 2025.

In the first four months (July–October) of FY26, ADP implementation slightly improved to 8.33 percent, compared to 7.9 percent during the same period in FY25. However, the implementation rate was higher in previous years: 11.54 percent in FY24, 12.64 percent in FY23, and 13.06 percent in FY22, according to data from the Implementation, Monitoring and Evaluation Division (IMED) under the planning ministry.

IMED officials had hoped for better implementation in FY26 after the record-low 67.85 percent implementation rate in FY25, which was affected by political upheaval and the fall of the Awami League government on August 5, 2024, following a mass uprising. However, the implementation rate is unlikely to rise significantly this year due to the general election scheduled for early February 2026, only four months before the end of FY26.

The National Economic Council, chaired by interim government chief adviser Professor Muhammad Yunus, is expected to hold a meeting next month for an early revision of the ADP so that the incoming elected government faces no difficulty in executing the revised plan.

As part of the planned cut, the government-funded portion of the ADP may be reduced by 11.11 percent to Tk 1,28,000 crore, down from Tk 1,44,000 crore. The foreign-funded portion may be slashed by 16.27 percent to Tk 72,000 crore, compared with the original allocation of Tk 86,000 crore.

A joint meeting of the Coordination Council and the Budget Management and Resource Committee on November 10 reviewed the progress of the current national budget as part of the early revision process.

Chaired by Finance Adviser Salehuddin Ahmed, the online meeting set a preliminary estimate to reduce the overall national budget by Tk 20,000 crore from its original size of Tk 7.9 lakh crore.

The meeting also decided to revise the country’s GDP growth forecast down to 5 percent from 5.5 percent for FY26, while adjusting the inflation projection up to 7 percent from 6.5 percent.