DHAKA: Bangladesh on Sunday boosted its development spending by 28 percent to a record 6.4 billion dollars for the new fiscal year, aimed at increasing economic growth to a record seven percent.
The National Economic Council led by Prime Minister Sheikh Hasina approved the 460 billion taka (6.4 billion dollar) annual development programme for the fiscal year starting July 1, Planning Secretary Manzur Hossain said.
"The size of the annual development programme is the highest ever and about 28 percent bigger than the ADP of last fiscal year. We have allocated highest amount for power and transport to boost seven percent growth," he told AFP.
Some 1.2 billion dollars would be spent to enhance power generation in an effort to cut severe shortages, he said.
"Electricity generation is our top priority because it is the key to growth. Unless we can fix this crippling problem, it will be impossible to achieve higher growth or cut poverty to a desired level," he said.
Another 1.1 billion dollars has been set aside to build roads and new railway tracks and more than 600 million dollars for rural development, he said.
In the outgoing fiscal year ending on June 30, the government spent 358 billion taka on development.
Last year the government launched a plan to generate 9,500 megawatts of additional power by 2015. Hossain said 2,000 megawatts of power capacity would be added in 2011 alone.
Years of under-investment in the power sector mean impoverished Bangladesh now has a daily shortfall of 2,000 megawatts, with rolling blackouts hitting the private sector, particularly manufacturing, hard.
The country -- home to 150 million people with nearly 40 percent living below poverty level -- is also facing an acute gas crisis, with no new discoveries for a decade and difficulties exploiting existing fields.
The two problems have sent manufacturing growth tumbling to just five percent in 2009-10 fiscal year -- from record double-digit growth in 2005-6 -- as factories struggle with long power cuts each day.
The World Banks says Bangladesh needs annual economic growth of 8.0 percent to achieve its goal of becoming a middle income country by 2021.
Copyright AFP (Agence France-Presse), 2011
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