Officials confirmed on Thursday that the government is set to reduce the national development budget by Tk 500 billion amid financial constraints. The cut will likely target domestic resource allocations within the Annual Development Programme (ADP), leaving external funding unaffected.

The revised fiscal year 2024-25 ADP budget is expected to drop to Tk 2.15 trillion from the original Tk 2.65 trillion. The Planning Commission (PC) and Economic Relations Division (ERD) are working on revisions, with a draft revised budget anticipated next month.

Officials revealed that ministries have been cautious in spending, with major development projects likely facing significant cuts.

The adjustments come as the government grapples with financial pressures, including a growing debt to local and international electricity providers. Funds reallocated from the development budget are expected to address these outstanding dues.

In the initial ADP, Tk 1.65 trillion was allocated from domestic resources and Tk 1 trillion from external sources. Poor project execution and declining ADP implementation—down to 7.90% in the first four months of the fiscal year—have prompted the revisions.

The revised ADP is slated for approval by the National Economic Council by February 2025.