The ADP 2004-2005 will be Tk 1,700 crore or 8 per cent higher than the original ADP for the current 2003-2004 fiscal worth Tk 20,300 crore, which was downsized to Tk 19,000 crore recently.
Development projects worth Tk 800 crore have been transferred to revenue budget in the next fiscal year for implementation.

The share of local resources in financing the original 2003-2004 ADP was 49 per cent (Tk 9,799 crore), but the revised ADP for the current fiscal upgraded that to 51 per cent (Tk 9,390 crore).

"No new tax will be imposed in the upcoming -budget on account of the increase in the proportion of local resources in financing the next ADP," Finance Minister M Saifur Rahman said after the approval of the ADP.

Rather, he said, the tax base would be: further broadened in the upcoming budget to raise local resources to finance the development outlay.

Allocation worth Tk 3,243.38 crore or 14.72 per cent of the next ADP has been earmarked for the power sector followed by Tk 3,189.79 crore or 14.47 per cent for the communication sector, and Tk 3,141.61 crore or 14.25 per cent for the education and religion sectors.

Tk 2,333.83 crore or 10.59 per cent has been earmarked for rural development, Tk 2,156.26 crore or 9.8 per cent for health, population and family welfare, Tk 1,035.76 crore or 4.70 per cent for infrastructure planning and water supply and Tk 880.73 crore or 4 per cent for the agriculture sector.

A Tk 40-crore allocation has been made for the development projects to be implemented through Gram Sarkar, _ the lowest tier of local government.

As usual, the approval of new ADP followed the trimming of the ADP of the outgoing fiscal (2003-04).

Within a couple of weeks of endorsing the new ADP, the NEC, with the Prime Minister in the chair, "revised" the ADP for the 2003-2004 fiscal to Tk 19,000 crore, down by Tk 1,300 crore or six per cent from its original size due mainly to non-availability of funds for foreign-aided projects.

The local resource component of the revised ADP is Tk 9,590 crore or 51 per cent of the total allocation, while Tk 9,410 crore or 49 per cent of the revised allocation is expected from external sources, officials said.

The original ADP outlay of the ongoing fiscal was Tk 20,300 crore. Of which, local resource was earmarked at Tk 10;000 crore or 49 per cent of the total allocation, while Tk 10,300 crore or 51 per cent of the total ADP was earmarked from project aid.

"We have increased the proportion of local resource in the revised ADP with a view to attaining self sufficiency," Saifur told newsmen after the meeting.

He, however, said the-government could not utilise original allocation of the development programme due to its poor implementation capacity and multilateral lending agencies' conditionality in releasing project aid.

The country needs an ADP worth about Tk 25,000 crore to meet the local demands of electricity, infrastructure and rural development, Saifur told newsmen, when concerns of economists on rationality of a big ADP, seldom implemented, were raised.

Anyway, the sector-wise allocations given in the Tk 22,000-crore development outlay for the 2004-2005 fiscal, especially its focuses on,rural economy, infrastructures and education, were appreciated by economists and business leaders. Obviously, there are doubts on where the money will come from to implement the development schemes.

The government should increase budgetary allocation for agriculture and provide direct subsidy to farmers to boost rural economy, economists suggested. They also stressed on special schemes for special groups of people, including pensioners, small savers and senior citizens.

Proposals for more investment in the law enforcing agencies,- in terms of salary increase and logistical support, also came, even from ruling party law makers.

Former finance minister Shah AMS Kibria was sceptical about the ADP allocation. "I was told that the ADP has been increased. This is of course a propaganda exercise. I don't believe he [Finance Minister Saifur Rahman] wants to implement a large ADP to benefit the poor. All his policies are designed for the rich," he told New Age in an interview last week.

Asked about his impression on the priorities given in ADP, Kibria said, "...the figures have no credibility. In the past he cut ADP size just after few months of framing it."

About the priority given on agriculture, Kibria said that the present government so far neglected agriculture and rural population. "He [Saifur] is now talking about increasing fund to rural economy. Obviously, his past policies were wrong."

He would not comment when asked what tax measures he suggests for mobilisation of more local resources to fund the development schemes. "I dorftknow how. Mr Saifur Rahman knows it well. In the last budget he raised the taxes for the poor and lowered those for the rich."

Kibria also expressed concern about the deteriorating law and order situation. "The economy won't pick up if law and order continues to nosedive. We are at a crossroads. Unless we take the path of restoring law and order, the economy will continue to go down."

Kibria, the finance minister of the 1996 Awami League government insisted on special schemes for special groups of people, including pensioners and small savers who rely on the proceeds from savings instruments.

He warned the finance minister about the cost of overlooking the common people's causes and advised him to take lessons from the Indian experience.

Even a five per cent plus growth would not save the government if people's concerns about price hike, unemployment and law and order situation are not addressed, Kihria said, citing that an 8 per cent economic growth could not help the BJP government in India avoid a humiliating election defeat.

Professor Muzaffer Ahmad told New Age that the policy thrust in the next budget should be on increased flow of resources to the rural economy to boost overall economic demand.

The finance minister may take some budgetary measures for rural-orierited resource mobilisation but these could end up being politicised in view of the next general elections, he feared.

'Allocation of funds for gram sarkar will see little result as these funds will be mostly distributed among the MPs, village touts and unscrupulous officials."

The economist felt that local government, especially union parishad, should have sufficient fund and also the authority to implement development programmes.

Ahmad strongly argued that more funds should be diverted for internal security as well as social safety net, so that people'can be benefited in the long run and contribute to the economy.

Professor Enamul Haque of North South University suggested that the government should develop a budgetary mechanism to take the agriculture subsidy, whatever amount it may be, directly to farmers. "This could be in the form of redeemable vouchers."

He also urged the government to consider developing a 'universal provident fund scheme' with contribution from small savers and to promote a 'safety net' for senior citizens.

Priorities in terms of infrastructures - road and rail communications, power, gas and telecommunications are a must for an economy to grow, Haque said. Private sector needs to be involved in these areas in a bigger way, he added.

Haque appreciated increase in ADP allocations for some of the key areas, but said allocation alone can not help if quality of works does not improve, given the fact that the government often fails to spend the money allocated due to handicaps in project implementation.

"If we expect 11 per cent industrial growth, we need to improve the backup supports. Project implementation should be given adequate attention," Haque told New Age last week.

He was worried that the quality of public education continued to fall and stressed on a wuality public education system in the country for all.

Lawmakers of the ruling coalition at a pre-budget consultaion in May advised the finance minister to go for drastic reforms in the police with adequate allocation in the next budget.

They sought government steps towards containing widespread corruption in the customs.