Foreign aid flow in the first six months of the current fiscal year fell 40 percent, with economists blaming the fear of donors about misuse of the funds ahead of the next general elections in Bangladesh, local daily The Financial Express reported Sunday.

Bangladesh received a total of 488 million U.S. dollars in foreign aid during July-December period of fiscal 2005-06 (July 2005-June 2006), down from 815 million dollars during the same period of the previous year.

The country's net foreign aid receipt during the period was however only 237 million dollars as it had to spend 251 million dollars for repayment of earlier debts, said an official of the Economic Relations Division (ERD) requesting anonymity.

Net foreign aid received by Bangladesh during the same period of fiscal 2004-05 was over 500 million dollars.

Of the 488 million dollars received during July-December period of 2005-06, 326.64 million dollars was available from the World Bank, 97.2 million dollars from the International Monetary Fund ( IMF) and the remaining amount from other donors, ERD sources said.

Atiur Rahman, Senior Research Fellow of Bangladesh Institute of Development Studies, said disbursement of donors' aid would reduce significantly in the upcoming months, as it is an election year.

The economists and sources in the concerned government agencies also blamed the government's inability to meet the tough conditions imposed by the donors for the low level of foreign aid disbursement during the time.

"Aid flow is declining gradually due to the government's failure to carry out the conditions imposed by the donors," Qazi Kholiquzzman Ahmad, President of the Bangladesh Economic Association said.

He said the country could easily reduce dependence on foreign aid by curbing corruption by 10-15 percent.

Finance and Planning Minister M Saifur Rahman earlier said in the parliament that the government has intensified internal resource mobilization through strengthening tax administration to reduce reliance on foreign aid.

The minister said the government expects a 22.86 percent increase in revenue collection in the current fiscal year, which was 19.7 percent in 2004-05 and 12.3 percent in 2003-04.

Source: Xinhua