[🇧🇩] Budget for 2025- 2026

[Saif]

https://thefinancialexpress.com.bd/economy/bangladesh/contractionary-fiscal-policy-for-private-sector-not-for-government-says-bnps-mintoo

Contractionary fiscal policy for private sector, not for government, says BNP’s Mintoo

bdnews24.com
Published :
Jun 21, 2025 21:55
Updated :
Jun 21, 2025 21:55

Abdul Awal Mintoo, business leader and vice-chairman of the opposition BNP, has criticised the government for applying austerity measures selectively in the proposed 2025-26 national budget.

Speaking at a discussion titled “Budget Debate: Context-Appendix” organised by the Bangladesh Economic Association (BEA) at the SIRDAP auditorium in Dhaka on Saturday, he said the austerity policies were designed only for the private sector, while the government exempted itself.

“To curb inflation, we’ve raised interest rates, fair enough,” he said. “We’ve also slashed the size of the budget by 7 to 8 billion under a tight fiscal policy.

“But what’s clear is that this contractionary monetary and fiscal policy is targeted solely at the private sector.”

Mintoo's remarks were sharply critical of what he sees as a dual standard in the government’s economic approach--tightening the belt for businesses while continuing unrestrained spending in public institutions.

He said: “In the past one and a half years, Bangladesh has received a total of Tk 3 trillion in bank deposits. The government has taken Tk 2.70 trillion from it. So I don't see a tight fiscal policy for them.”

He advised the government to take all aspects into consideration and adopt a policy after judgement and analysis.

Although the interim government has talked about reforms in several areas, Mintoo says they are not evident.

Pointing out that the proposed budget also does not show any reforms to the identified problems of the economy, he said: “On one hand, economic growth is low, on the other hand, inflation is high.

“To get out of this situation, some reforms could have been made in this budget. But I haven't seen that.”

On Jun 2, Finance Advisor Salehuddin Ahmed presented a budget of Tk 7.9 trillion for the new fiscal year.

Although the overall budget has been reduced, most of the reduction has been done in the development sector, which directly benefits the citizens.

A notable rise is seen in non-development or operating expenditure. For the upcoming fiscal year, operating expenditure has increased by Tk 283.46 billion to Tk 5,353.17 billion.

In comparison, the outgoing 2024-25 budget had set operating expenditure at Tk 569.71 billion, which was later revised down to Tk 560 billion.

The proposed budget for the upcoming fiscal year estimates a deficit of Tk 2.26 trillion, of which Tk 1.26 trillion, which is equivalent to 2 percent of GDP, will be sourced internally.

Among these internal sources, the government plans to borrow Tk 140 billion from the banking sector, representing 1.67 percent of GDP.

In addition, it aims to raise Tk 125 billion from savings certificates and Tk 210 billion from non-bank financial institutions.

ADVISOR SEES “NATIONAL CONSENSUS” ON CORRUPTION

The chief guest of the discussion meeting, Muhammad Fouzul Kabir Khan, shared his experience after taking over as the interim government’s advisor on power, energy, and mineral resources.

He said, “I’ve seen a national consensus on corruption. No one is exempt. Politicians, bureaucrats, professors, everyone is involved.”

Giving an example, he said: “There was a report in Prothom Alo about the Bridges Division, which falls under one of the ministries I oversee.

“They built buildings for the rehabilitation of those who have been affected by a project, but later discovered some areas had been left out.

“So as a solution, they decided to distribute it among government officials. But there’s already a separate ministry for that, the Ministry of Housing and Public Works.

“It was unimaginable that even cabinet secretaries and university professors were taking bribes.”

Regarding lobbying, he said: “Politicians still meet with me, but none of them want corruption to end. Rather, they want to be complicit in it themselves.

“They say things like, ‘we couldn’t do business during the fascist era, so now it’s our turn'.”

In contrast, regarding the government’s efforts, he said: “We’re trying to introduce competition in the economy. Wherever there’s business, there should be competition. We’ve opened everything up.”

He expressed hopes of inflation declining by July or August.​

 

[Saif]

FY26 budget to be passed today

The interim government is going to pass the national budget for the 2025-26 financial year today, with the proposed money legalisation facility through the construction of buildings on own land and the purchase of flats likely to be dropped.

www.newagebd.net

FY26 budget to be passed today
Money legalisation scope likely to be dropped

Staff Correspondent 22 June, 2025, 00:06

The interim government is going to pass the national budget for the 2025-26 financial year today, with the proposed money legalisation facility through the construction of buildings on own land and the purchase of flats likely to be dropped.

On June 2, finance adviser Salehuddin Ahmed unveiled a Tk 7.9 lakh crore proposed budget for the financial year beginning on July 1 in a televised address in the absence of Jatiya Sangsad.

It is the first budget of the interim government that assumed power on August 8, 2024, three days after the ouster of the authoritarian Awami League regime in mass uprising.

Internal Resources Division officials said that a preliminary decision was made to drop the money legalisation provision amid widespread criticism against the facility.

They said that the final decision on the issue would come from a meeting of the advisory council today.

Planning adviser Wahiduddin Mahmud in a post-budget discussion arranged by local think-tank Research and Policy Integration for Development in the capital Dhaka on Saturday said that the special scope for legalising undisclosed money had brought no major benefits in the past years in term of generating tax.

‘So, dropping the provision proposed in the FY26 budget will not make a big difference,’ said the planning adviser.

The IRD officials, however, said that a general scope for legalising undisclosed money would be kept in the FY26 budget for taxpayers who failed to disclose their legal incomes in the past years.

In that case, the taxpayers have to pay penalty in addition to giving the maximum income tax as per the proposed slabs, they said.

The National Board of Revenue is also expected to bring about some minor changes to the budget proposals.

The minor changes are linked to the cancellation of 5 per cent advance income tax on imports of lenses and the same amount of duty on import of heart rings, the officials said.

Besides, import duty on solar panel may be reduced, they said.

In the absence of parliament, the passage of the national budget will be made by promulgating an ordinance.

An ordinance on the proposed budget was also promulgated on June 2.

The interim government has proposed an outlay of Tk 7.90 lakh crore in the FY26 budget with Tk 5.6 lakh crore has been earmarked for non-development budget.

The development budget has been set at Tk 2.30 lakh crore.

The target for the gross domestic product growth has been set at 5.5 per cent, that for inflation at 6.5 per cent, and that for private investment at 24.31 per cent in FY26.

The overall revenue income has been set at Tk 5.64 lakh crore. Of the amount, Tk 4.99 lakh crore is projected to be generated by the National Board of Revenue.

The finance adviser has projected net loans of Tk 96,000 crore from external sources and Tk 1.25 lakh crore borrowing from domestic sources to meet the deficit accounting for 3.6 per cent of the projected GDP at Tk 62.44 lakh crore in FY26.​

 

[Saif]

Budget approved with money-whitening scope blocked, tax readjustments

Scope for legalizing undisclosed money is finally blocked while safety net widened as the new national budget for FY2025-26 is approved with changes in fiscal measures, including tax cuts. The government ramped up the allocation for social safety-net

thefinancialexpress.com.bd

Special annuity granted for govt employees, pensioners
Budget approved with money-whitening scope blocked, tax readjustments

Published :
Jun 23, 2025 00:03
Updated :
Jun 23, 2025 00:03

Scope for legalizing undisclosed money is finally blocked while safety net widened as the new national budget for FY2025-26 is approved with changes in fiscal measures, including tax cuts.

The government ramped up the allocation for social safety-net programmes by over Tk 100 billion, raising the total to Tk 912.97 billion.

Another key decision involves deferring the third phase of incentive cuts for exporters. Initially scheduled for July 2025, the cut will now take effect from January 2026.

The announcements were made Sunday at a press conference organised by the Ministry of Finance following the final seal of approval given to the Tk 7.9-trillion budget by the council of advisers of the interim government.

The budget, endorsed by the Advisory Council at its meeting on the day with Chief Adviser Professor Muhammad Yunus in the chair, will be authenticated with a presidential ordinance for execution as there is no parliament in the interregnum created through the 'July mass uprising'.

"We've dared to abolish the provision for whitening black or undisclosed money-something no one did before," said Finance Adviser Dr Salehuddin Ahmed during the briefing in the Finance Division conference room in Bangladesh Secretariat.

The finance adviser said the government refrained from launching any megaprojects and excluded many non-essential ones to keep the development budget realistic.

"We've also focused on the value of money. We are borrowing Tk 5.0 and want to utilise it efficiently, rather than spending our own Tk 2.0 or Tk 3.0 casually."

Framed in the wake of economic volatility amidst political tumults at home and abroad, the budget cautiously estimates GDP growth at 5.5 per cent while taming inflation to 6.5 per cent for the fiscal year starting July 1.

He said the third-phase incentive cuts for exporters, scheduled for July 2025, will now take effect from January 2026. The postponement is to allow the private sector time to adjust, explains Mr Ahmed, who holds the nation's purse strings in the interim period.

"So far, two reductions in incentives have been made, and the third was scheduled for July. We pushed it to January to support private investment."

Although the budget, initially proposed on June 02, retained the option for legalizing black money through real-estate investments, this provision was later dropped on public backlash.

According to NBR sources, around Tk 470 billion in undisclosed funds had been declared under such schemes in the past for mainstreaming the unaccounted-for money.

However, despite offering this chance to repatriate laundered money in FY2022-23, no one availed of the clemency.

At the press conference, National Board of Revenue (NBR) Chairman Md. Abdur Rahman Khan confirmed the rollback: "We initially allowed the whitening of black money with additional taxes. However, following demands from various stakeholders, the provision has been removed."

Several changes have been made in tax policy related to VAT, customs duties and income tax.

Publicly traded companies that raised paid-up capital via IPOs or direct listings will be taxed at 22.5 per cent-or 20 per cent if all income is through bank transactions.

Other publicly traded companies will face a 27.5-percent rate-reduced to 25 per cent if income is bank-transacted.

Private universities, medical, dental, engineering, and IT-only colleges will enjoy a cut-down tax rate of 10 per cent from 15 per cent.

Property-transfer tax deductions have been lowered to 5.0 per cent, 3.0 per cent and 2.0 per cent from 8.0 per cent, 6.0 per cent and 4.0 per cent respectively. In value-added tax (VAT), advance tax on refined petroleum imports has been reduced to 2.0 per cent from 7.5 per cent.

VAT exemption is granted at the production stage for cotton made from environment-friendly by recycling 'garment jhut (scraps)'.

Also, VAT exemption now applies to rent on spaces used by women-run beauty parlours.

Ballpoint pens and imports of heart rings and eye lenses are now VAT-free following the revisions in fiscal measures.

Under customs duties, the government plans to implement invoice-based customs valuation for petroleum imports, reducing crude-oil duties from 5.0 per cent to 3.0 per cent, and other petroleum duties from 10 per cent to 6.0 per cent.

Solar inverter-import duties have been slashed from 10 per cent to 1.0 per cent to support solar energy on the cusp of transition to clean energy.

Duty on Technically Specified Natural Rubber, used in tyre production, got halved from 10 per cent to 5.0 per cent.

Ten additional medical equipment items have been added to the duty-free list to improve healthcare access. A special allowance has been set at a minimum of Tk 1,500 for government employees and Tk 750 for pensioners.

Pensioners receiving Tk 17,388 or more will get a 10-percent hike, while those receiving less will get a raise by 15 per cent.

Dr Ahmed said nearly 400 public suggestions had been received since the announcement of the budget on June 02, reflecting "growing civic engagement in economic policymaking".​

 

[Saif]

CPD calls for mid-term review to ensure efficient implementation of FY26 budget

As the FY2025–26 national budget nears formal approval by the interim government, the Centre for Policy Dialogue (CPD) has called for a mid-term review of the budget's implementation status to ensure transparency, accountability, and course correction if necessary. Speaking at the “CPD

thefinancialexpress.com.bd

CPD calls for mid-term review to ensure efficient implementation of FY26 budget
The think tank says budget lacks alignment with stated goals of equity and sustainability

FE ONLINE REPORT
Published :
Jun 22, 2025 11:55
Updated :
Jun 22, 2025 12:24

As the FY2025–26 national budget nears formal approval by the interim government, the Centre for Policy Dialogue (CPD) has called for a mid-term review of the budget's implementation status to ensure transparency, accountability, and course correction if necessary.

Speaking at the “CPD Budget Dialogue 2025”, held at a city hotel on Sunday, CPD Executive Director Dr Fahmida Khatun noted that although the budget puts forward progressive themes—such as a focus on overall development rather than just growth, and prioritising people over physical infrastructure—these objectives are not sufficiently supported by the proposed fiscal measures.

“The budget for FY26 is exceptional in terms of its size, being smaller than the previous fiscal year's, but this contraction has not been matched with a clearly articulated strategy to address ongoing economic challenges,” said Dr Khatun during her keynote presentation.

“We appreciate initiatives like tax reliefs, sectoral allocations, and incentives, along with higher taxation on harmful activities. However, the budget falls short of offering a holistic response to the difficulties currently facing people and businesses.”

She further observed that certain fiscal measures contradict the budget's overarching theme of ‘Building an Equitable and Sustainable Economic System’, weakening its credibility and practical relevance.

“The interim government must take responsibility for implementing this budget in an efficient and transparent manner,” Dr Khatun stressed.

“A mid-year assessment with corrective measures will be crucial for maintaining public trust and ensuring the budget delivers on its promises.”

The event was moderated and chaired by CPD Distinguished Fellow Professor Mustafizur Rahman, who echoed the importance of aligning fiscal measures with declared priorities.​

 

[Saif]

Not a budget of dream!

The interim government's Finance Adviser, Dr Salehuddin Ahmed, in response to criticism of the just-approved budget for FY 2025-26 that it followed an 'old road', came out forcefully saying that it was rather a 'highway born out of the old road'. The argument he produced to answer his critics is mo

thefinancialexpress.com.bd

Not a budget of dream!

SYED FATTAHUL ALIM
Published :
Jun 24, 2025 01:03
Updated :
Jun 24, 2025 01:03

The interim government's Finance Adviser, Dr Salehuddin Ahmed, in response to criticism of the just-approved budget for FY 2025-26 that it followed an 'old road', came out forcefully saying that it was rather a 'highway born out of the old road'. The argument he produced to answer his critics is more rhetorical than substantive. Obviously, the expectation from the critiquing economists was that the budget would reflect the revolutionary transformation that the nation underwent through the July upheaval of 2024. Or in other words, the first budget of this government of change would be somewhat reformist, if not revolutionary, and not at all a traditional one, the critics expected.

Budgets are essentially the financial statement of a government's anticipated revenue incomes and planned expenditures for a particular financial year. Anti-people governments like the one ousted in August last year, are characterised by the way they allocated the nation's resources in the budget. The rich and the section of the population that the government of the time represented naturally got the lion's share of the budgeted amount. The rich paid less in terms of income tax, while the people in the lower income bracket paid more. The local economic think tank, the Centre for Policy Dialogue (CPD), for instance, criticised the proposed changes in the pattern of levying income tax in the new budget. It said, the budget disproportionately raised tax burden on the low and middle income earners over the next two fiscal years. "From a distributional perspective this (budget) structure is not balanced. A key objective of the national budget is to reduce inequality, and this structure doesn't align with that goal", said Dr Fahmida Khatun, the think tank's Executive Director.

The past governments, fascistic or otherwise, were known for their yearly budgets that favoured the privileged sections of society at the expense of the rest of the population. Those were the traditional budgets. So, where does the present budget prepared under the leadership of the incumbent finance adviser depart from the traditional ones? True, his is not, as the Finance Adviser would like to describe, a 'dream budget' .But dream is too fanciful a metaphor for the government's present annual financial plan which is ordinary and lacks imagination. No doubt, the decision of not to go for any new large-scale infrastructure projects in the coming year is commendable. Scrapping of the dormant or underperforming projects as part of rationalising the Annual Development Programme (ADP), too, is admittedly a step in the right direction. Similarly, allocation of Tk 912.97 billion which exceeds the allocation proposed initially by Tk.100 billion for the Social Safety Net (SSN) programme to protect the poor and the vulnerable, is a piece of good news for the intended beneficiaries of the programme. Started by the past government as a sop for the needy, the question about how far the genuine candidates for the allowances are being benefitted remains. For there were allegations galore in the past about the SSN allowances being misappropriated by fake recipients linked to local ruling party goons. It is not clear, if the interim government has developed a sound database of actual beneficiaries so the money is not wasted. However, It would make a real difference if the budget planners could conceive of a set of income generating projects with the SSN fund where the targeted beneficiaries would be involved according to their abilities. That would provide a better opportunity for the poor and the vulnerable to work and earn income with dignity rather than being mere recipients of dole. And such a programme would be more imaginative or dreamlike as the adviser might like to put it.​