The government is set to downsize the Annual Development Programme (ADP) for the current fiscal year of 2023-24 by nearly 7 percent while prioritising projects having the highest impact, according to planning commission sources.

The National Economic Council is likely to approve a revised ADP of Tk 245,000 crore in its upcoming meeting on March 12.

This may lead to a decrease in government and foreign funds allocated in the original ADP by 4.43 percent and 11.17 percent, respectively.

The current ADP has kept government funds of Tk 169,000 crore and foreign funds of Tk 94,000 crore.

The revision was approved at an extended Planning Commission meeting on Sunday following a finance ministry proposal.

Such revisions are annually undertaken but usually, it is only the foreign fund allocation that is reduced. However, neither the foreign nor the local fund ends up being fully utilised at the end of the fiscal year.

In the first seven months of the current fiscal year, the government managed to spend around 27 percent of the total allocation, which is the lowest at least in the last 13 years.

The government and the Bangladesh Bank have taken several measures, including controlling public expenditure, to counter higher inflation and the falling of foreign exchange reserves.

Since March last year, overall inflation has been running high at more than 9 percent while the reserves have decline gradually over the past two years, plummeting to $20.19 billion on February 20.

The revision has given top priority to the transport and communication sector from the local government sector. The power and energy sector has retained the second spot.

"We have moved to cut down the allocation as per Prime Minister Sheikh Hasina's directive to focus more on the impactful projects considering the benefits for the masses," said a top planning ministry official seeking anonymity.