According to one estimate, around Tk 60,000 crore lies with the government whereas public hospitals lack medicine, run-down roads remain without repair for years and schools close down because of fund crisis.

The estimate says Tk 10,000 crore is lying idle with the country's commercial banks in excess liquidity. A total of $6.2 billion, equivalent to Tk 36,000 crore, is in the foreign aid pipeline. And, the foreign currency reserve stands at over $2.5 billion, equivalent to Tk 15,000 crore.

Economists say there is no lack of fund in Bangladesh for taking programmes to develop infrastructure and pull people out of economic woes.

"Bangladesh is suffering from a lack of proper mechanism to spend the funds it gets," said Dr Debapriya Bhattacharya, a leading economist and Executive Director of the Centre for Policy Dialogue, an independent civil society think-tank.

He said a paralysis of the delivery mechanism in the public sector and absorptive capacity failure in the private sector, which is reflected in the over-subscription of initial public offerings in the share market, as the main reasons for huge amounts of money remaining unused.

The commercial banks are not finding proper way to invest excess liquidity for commercial activities and setting up mills and factories to contribute to the national economy, according to officials. As a result, no new employment opportunities are created, which would have reduced poverty.

The economists blamed deteriorating law and order situation in the country for poor investment in the private sector. Industrialists would be enthusiastic in investing their hard earned money only if the law and order improves, they pointed out.

To make matters worse, foreign aid is not being released because of poor performance of the development projects as 96 percent of the aid has been committed against development projects.

The government takes hundreds of projects under the ADP every year but scores of these projects remain unimplemented leaving the money allocated for the projects unutilised. Though the government allocates a huge amount of money against these projects, the funds do not get released because of poor rate of implementation, the economists said.

For instance, the government allocated Tk 20,300 crore for the ADP for the current 2003-04 fiscal year but revised it down to Tk 19,000 crore due to poor project performance.

According to another estimate, only 45 percent of the ADP was implemented in the first nine months of the current fiscal. The economists expressed doubt about whether more than Tk 17,000 crore would ultimately be spent by the end of the year.

Around 20 percent of the ADP in the previous fiscal also remained unimplemented. According to a survey conducted by the CPD, the rate of ADP implementation in the first nine months was only 54 percent in 2001 and 42 percent in 2002.

In the current fiscal, a number of ministries showed remarkable failure in implementing the ADP projects. For example, the allocation against the planning ministry was cut to only 7 percent to a mere Tk 33 crore from Tk 521.

The allocation against the establishment ministry was reduced to Tk 39 crore from Tk 57 crore because of poor performance in the middle of the ongoing fiscal year.

A recent CPD survey found four major causes for poor performance of the ADP and government's other schemes taken for providing economic safety net to the poor.

These are introduction of new public procurement policy limiting the scope for corruption in the implementation of foreign-aided projects; inability of the government officials to undertake anticipatory actions as agreed with the development partners; over-centralisation of the project planning and approval process and the state of uncertainty pervading the public administration in the backdrop of growing political confrontation.

It suggested massive reforms in the public administration and strengthening of local government for better use of government fund. A strong and elected local government authority would be in a better position to take people-oriented programme and development of infrastructure in the locality.

It also suggested an increase in the number of police forces and bringing professionalism among the cops for ensuring a better law and order situation, drawing more investment, both foreign and local. Huge employment generation would bring money to the general people and gradually reduce poverty, it maintained.