The government on Wednesday suspended funding for low-priority projects under the annual development programme of the current financial year as part of its austerity measures against COVID-19 fallouts.

All ministries and divisions excepting the ministry of health and the ministry of agriculture have been asked to implement the high- and medium-priority projects.

Regarding the medium-priority projects, the ministries and divisions have also been asked to provide fund only to the unavoidable projects.

The finance ministry issued the guideline in a statutory regulatory order on Wednesday, four days after it had banned the procurement of vehicles by ministries and divisions until December.

Planning minister MA Mannan said that the finance secretary and the planning secretary consulted the respective secretary of the ministries and divisions to identify the priority of the projects.

The exercise was taken place for more than a month, he said.

Policy Research Institute executive director Ahsan H Mansur said that it became imperative for the government to cut expenditure in the backdrop of negative growth in the revenue generation in 2019-20.

Due to the coronavirus-induced disruption in economics activities, the tax collection by the National Board of Revenue recorded a 3.79 per cent negative growth in 2019–20.

The revenue earned in the financial year was Tk 2,15,400 crore in place of Tk 2,23,892 crore mobilised in 2018-19.

Finance ministry’s priority of project funding will affect the ADP worth Tk 2,05,145 crore taken amid criticisms by economists that sanctioning Tk 15,691 crore allocation to the Rooppur Nuclear Power Plant project was not wise amid the sharp economic downturn.

World Bank in Dhaka former chief economist Zahid Hussain said that the transport infrastructure, construction and power sectors were given the highest allocations although top priority was health sector to save the lives.

The health sector investment has been 6.34 per cent of the total budget in 2020-21 compared to 5.8 per cent in the original ADP in 2019-20.

The COVID-19 outbreak has already hit the ADP in the just concluded fiscal as the rate of execution stood at 80.18 per cent, a new lowest over 80.70 per in 1992-1993.

The finance ministry directive also issued just a day after prime minister Sheikh Hasina wanted austerity steps in the public expenditure.

The government’s operational cost rose four and a half fold to Tk 3,48,180  crore in the current fiscal year from Tk 77,243 crore in 2009-10 as the perks and privileges of the government officers and employees were raised on a number of occasions.