Interim Government Increases Project Spending by 80,000 Crore

Dr. Muhammad Yunus’s interim government assumed office on 8 August 2024, following the July–August mass uprising, pledging to curb wasteful expenditure, streamline development projects, and improve administrative efficiency. Yet, recent analyses of Executive Committee of the National Economic Council (ECNEC) meeting minutes suggest a starkly different reality. During its 18-month tenure, the interim government has overseen an abnormal increase in spending on at least 65 development projects, adding nearly ₹79,834 crore to the national budget.

Expectations were high that the government would halt the recurring trend of inflated costs under the guise of revised project approvals. Annual Development Programme (ADP) projects, in particular, were promised rigorous scrutiny. However, a detailed review of the Economic Relations Division and ECNEC meeting minutes reveals the opposite has occurred.

In 19 ECNEC meetings, a total of 87 ongoing projects were revised—averaging nearly five amendments per meeting. Only seven projects saw reduced spending, resulting in savings of just ₹950 crore, or merely 2.45% of their prior allocations. In contrast, 65 projects experienced a collective cost escalation of nearly ₹80,000 crore. An additional 15 projects retained their original budgets but had extended completion deadlines.

The initial estimated expenditure for the 65 projects stood at ₹2,24,000 crore, which has now risen to ₹3,04,000 crore—an average increase of 35.67%. Economists had anticipated stricter oversight to prevent unnecessary spending, making these revisions deeply contradictory.

Key Project Expenditure Changes

While some exceptions exist, such as a reduction in the Dhaka Metro Rail budget by ₹754 crore due to the exclusion of certain land acquisition and station development costs, the broader pattern reveals a significant surge in expenditure.

Additionally, the interim government initiated 135 new projects, with approved funding totalling ₹2,03,000 crore. Notably, the bulk of this allocation has been directed towards projects in Chittagong, while 21 districts received no specific project allocations.

Economists note that the interim government had intended to prioritise small but high-impact projects, reduce reliance on foreign-aided programmes, and ensure stricter approval procedures. Yet, repeated cost revisions suggest the entrenched culture of project inflation persists. The 80,000 crore increase across 65 projects raises fresh questions about fiscal discipline and whether meaningful reform in project management will ultimately be realised.