Bangladesh cuts 2007/08 development spending

DHAKA, March 27 (Reuters) - Bangladesh has cut development spending by nearly 18 percent to 40 billion taka ($583 million) in the current fiscal year to June 30 due to low implementation of the allocated funds, a senior official said on Thursday.

“Considering the reality, spending in the annual development programme was reduced to 225 billion taka ($3.28 billion) from 265 billion taka ($3.86 billion),” the official, who declined to be named, said.

But economists say even the revised target was doubtful.

“During the first eight months only 30 percent of the ADP (Annual Development Programme) was implemented,” said Qazi Kholiquzzaman Ahmed, President of Bangladesh Economic Association.

“And now it is simply impossible to implement the remaining 70 percent within the next four months of the current fiscal year of 2007-2008,” he said.

The government cut funding mainly for the power, health, education, agriculture and transport sectors, the government official said.

He said that ministries in charge of those sectors had surrendered a large portion of funds from their allocation as they felt that they would be unable to spend the money within the stipulated period.

($1=68.58 taka)

Reporting by Serajul Islam Quadir; Editing by Tomasz Janowski