Government moves to expand ADP by 6.5% in FY2025–26

A larger Annual Development Programme (ADP) is on the table for the fiscal year 2025–26, with the interim government going for a Tk 2.3 trillion plan—up 6.5 percent from the latest revision.

The caretaker administration had slashed the original ADP for FY2024–25 from Tk 2.65 trillion to Tk 2.16 trillion.

The new ADP thus represents a Tk 140 billion rise from the revised figure.

This expansion was approved at a National Economic Council (NEC) meeting presided over by Chief Advisor and NEC Chairperson Muhammad Yunus on Sunday.

The new allocation, however, is Tk 350 billion or 13.2 percent lower than the previous fiscal year’s original ADP.

Following the NEC’s approval, the government will now finalise the ADP in the national budget.

Explaining the lower figure compared with last year’s original plan, Planning Advisor Wahiduddin Mahmud said: “This time we are scaling the budget down. Or rather, we are making it more realistic.”

Including allocations for autonomous bodies and state-owned corporations, the total proposed ADP stands at Tk 2.38 trillion, down from Tk 2.78 trillion in the original ADP of FY2024–25.

Of this, Tk 1.44 trillion will come from domestic sources while Tk 860 billion is expected from foreign loans.

A total of 1,143 projects are scheduled for implementation in FY2025–26.

The highest allocation goes to the transport and communication sector, at Tk 589.73 billion—25.64 percent of the total ADP.

This is followed by Tk 323.92 billion for the power and energy sector (14.08 percent), Tk 285.57 billion for education (12.42 percent), Tk 227.76 billion for housing and community facilities (9.9 percent), and Tk 181.48 billion for health (7.89 percent).

At a post-meeting briefing, Wahiduddin said comparing this year’s proposed budget with last year’s original figures would be misleading. “The problems that plagued last year’s ADP are no longer present.”

“We now understand the issues with implementation. So, the projects we continue this year, we expect to be completed more quickly and with less waste and irregularities,” he added.

He noted that compared with the current year’s revised ADP, every sector is getting more funds, particularly education.

Health, however, will not see a significant rise. The advisor explained that though funds have been spent on infrastructure at district and Upazila levels, many of the health centres remain unused due to a lack of doctors and essential equipment.

“These challenges will be addressed in the revenue budget, not the development one,” he said.

On the broader fiscal approach, Wahiduddin outlined the interim government’s key targets for the upcoming budget: bringing back discipline in budget management, containing inflation, and keeping the deficit low to avoid falling into a debt trap.

“The aim is a sustainable budget — one that doesn’t push us into more borrowing, whether from abroad or domestically, just to finance shortfalls. That cycle must be broken,” he said.

Typically, the budget deficit hovers around 5 percent of GDP, but this time the government wants to bring it below 4 percent.

Wahiduddin said, “Since revenue can’t be boosted overnight, we will work to increase it gradually from this year. At the same time, expenses must be restrained to reduce the deficit,” he said.

He also remarked that “this won’t be an irresponsible budget”.

Calling it a “budget to restore discipline”, he said there would be no expenditures aimed solely at short-term public satisfaction at the cost of long-term fiscal pressure.

The advisor reiterated that the current administration will not pursue new mega projects.

Instead, it is focusing on securing long-term, low-interest foreign loans while paying down previous debts.