[🇧🇩] Budget for 2025- 2026

[Saif]

Smaller in size, larger in intent

Finance Adviser Salehuddin Ahmed has offered both empathy and arithmetic in his budget speech, laying out a vision that puts people, not just projects, at the heart of economic policy.

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Smaller in size, larger in intent

It’s a budget that tries to do more with less -- and do it differently. Faced with limited fiscal space and high expectations, the govt goes for people-first priorities

Finance Adviser Salehuddin Ahmed has offered both empathy and arithmetic in his budget speech, laying out a vision that puts people, not just projects, at the heart of economic policy.

The first budget from the interim government is smaller in size but larger in intent. It's a symbolic break from bloated spending and inflated promises. Gone is the language of sky-high growth. In its place, Ahmed pushed for what he called "holistic development".

He spoke of the families of the July Mass Uprising -- of the martyrs, the injured, and those left behind. He described mothers unable to afford protein, farmers stranded by flash floods, and migrant workers searching for dignity abroad. He acknowledged the invisible labour of women whose unpaid work sustains households but goes uncounted in the national economy. The adviser also looked ahead, highlighting telemedicine, tech-adapted teaching, and a banking system on the mend.

In a clear shift from the past, the FY26 budget prioritises people over infrastructure. "Instead of highlighting the traditional physical infrastructure development, we have given priority to the people," he said. Ahmed underscored the importance of safeguarding fundamental rights and ensuring access to a dignified life. Without these, he warned, "any state becomes ineffective, and the foundation of a society is weakened."

The budget reflects a broader national ambition: to build a society free from poverty and unemployment, and committed to a zero-carbon future -- an echo of Chief Adviser Muhammad Yunus's "three-zero" vision.

The government has placed youth almost at the centre of its economic vision, rolling out initiatives focused on skills training and entrepreneurship. The finance adviser said the aim is to harness the energy and potential of young people to build a more self-reliant workforce. However, analysts argue that the budgetary allocations fall short of what's needed to meaningfully address the scale of youth unemployment.

Empathy for a wider society shapes the budget's tone, but beneath it lies a sober economic reality. In a year clouded by inflation fatigue, fragile policymaking, and the structural hangover of the past disgraced regime, Ahmed presented a budget grounded in restraint. And the people-first framing masks the harder constraints underpinning the budget: ballooning debt.

GDP growth is projected at 3.97 percent this fiscal year. While growth may pick up to 6.5 percent in the medium term ahead, the adviser warned that inflation, driven by the Russia-Ukraine war, remains tough to control. Still, tighter policies have brought it down to 9.05 percent in May from a peak of 11.66 percent last July.

FISCAL DISCIPLINE

The budget balances social spending with bold tax reforms, but its success depends on improbable revenue gains, a gamble that could backfire amid global economic headwinds.

The most significant structural reform comes from the elimination of corporate tax exemptions, a clear departure from the previous government's tendency to perpetually extend such benefits. This move, coupled with sweeping reductions in import duties across hundreds of items, suggests a genuine effort to broaden the tax base and improve competitiveness.

The success of these measures depends on two precarious assumptions: first, that removing exemptions will not trigger backlash from the business community; and second, that customs revenue losses will be offset by increased compliance. Historical precedent is not encouraging; the tax-to-GDP ratio has stagnated around 8 percent for years, well below regional peers.

The tax measures could lay the groundwork for a more rational system, but only if future governments resist pressure to reintroduce exemptions.

With the National Board of Revenue collecting just Tk 362,000 crore last fiscal year, the new target of Tk 499,000 crore for the upcoming year seems overly ambitious. So far, the NBR has raised only Tk 289,000 crore in the first 10 months of the current fiscal year.

The fundamental tension lies in how expenditures will be funded. With the budget deficit projected at 3.6 percent of GDP and likely to expand if revenue falls short, Bangladesh risks either compromising its development spending or accumulating more expensive debt. The lack of concrete plans to improve tax administration efficiency suggests the government may be relying on domestic borrowing, which could crowd out private investment and push interest rates higher.

Ultimately, Bangladesh's economic trajectory will depend less on budget proposals than on whether it can break its chronic cycle of weak revenue mobilisation and stopgap financing. Without deeper reforms in tax administration and public expenditure management, even the most well-intentioned fiscal plans will remain aspirational.

The adviser insisted that measures are already in motion to expand the tax base, phase out exemptions, and modernise revenue systems.

One of the more contentious elements of the budget is the decision to impose an additional 7.5 percent tax on publicly traded companies that have issued less than 10 percent of their shares through a public offer. Critics argue the move is not only punitive but also discriminatory, especially in a market already struggling with low investor confidence.

Equally counterintuitive is the withdrawal of the reduced tax rate previously granted to companies conducting transactions through formal banking channels. At a time when the government is promoting financial transparency and digital payments, this measure undermines efforts to build a cashless economy.

Salaried taxpayers, too, are feeling the squeeze. While the hike in the tax-free threshold at the entry level offers some relief, the broader restructuring of tax slabs may ultimately place a greater burden on the middle class. That runs counter to the concept of equity and erodes disposable income in an already inflationary environment.

DEMOCRATIC TRANSITION

Macroeconomic stability was one pillar of the budget, and the other was democratic transition.

In one of the most politically resonant moments of his speech, Ahmed underscored the interim government's commitment to restoring electoral integrity. "One of our goals is to reestablish people's voting rights through a free and fair election and to hand over power to a democratic government," he said, adding that the country's electoral system had been "completely tampered with" over the past decade and a half.

The timing of the message was significant: the budget was unveiled on the same day Chief Adviser Muhammad Yunus resumed dialogue with political parties.

Ahmed said electoral reform had been given the "highest priority." The voter list has been updated, and new technology is being deployed to bolster transparency.

Ahmed's speech reflected a careful balancing act between calls for equity and stabilisation. This is a budget that tries to do more with less and do it differently. Whether it can deliver, amid bureaucratic bottlenecks, shaky institutions, and electoral uncertainty, will depend less on what is written in budget documents and more on what the government can implement in the months leading up to the national election.​

 

[Saif]

Observation at AmCham discussion: Budget is highly ambitious, implementation will be difficult,

Panelists at a post-budget discussion organised by the American Chamber of Commerce in Bangladesh (AmCham) on Tuesday described the proposed national budget for FY 2025–26 as “highly ambitious” and warned that its implementation will be difficult amid economic and political uncert

thefinancialexpress.com.bd

Observation at AmCham discussion: Budget is highly ambitious, implementation will be difficult,
Panelists observe at AmCham discussion

FE ONLINE REPORT
Published :
Jun 03, 2025 20:06
Updated :
Jun 03, 2025 20:15

Panelists at a post-budget discussion organised by the American Chamber of Commerce in Bangladesh (AmCham) on Tuesday described the proposed national budget for FY 2025–26 as “highly ambitious” and warned that its implementation will be difficult amid economic and political uncertainties.

Held in Dhaka, the event was chaired by AmCham President Syed Ershad Ahmed, with Dr M Masrur Reaz of Policy Exchange Bangladesh presenting the keynote. Chief Adviser’s Special Assistant Dr Anisuzzaman Chowdhury attended as chief guest.

Dr Reaz said the budget lacks clear direction on investment, employment, and structural reform. He termed revenue, inflation, and GDP targets overly optimistic, given current instability.

While welcoming increased allowances for public servants and business-friendly tax measures, he flagged concerns over insufficient support for job creation—especially for rural women—and unchanged allocations for education and health. Panelists urged practical reforms to meet economic goals.​

 

[Saif]

New budget is realistic and frugal: Planning Adviser

Planning Adviser Wahiduddin Mahmud on Tuesday termed the budget placed by the interim government "realistic and frugal'. "I will tell this budget realistic and frugal, aiming to ensure a fragile economy into a stable one where all financial institutions and all other state organisations were demol

thefinancialexpress.com.bd

New budget is realistic and frugal: Planning Adviser

Published :
Jun 03, 2025 21:47
Updated :
Jun 03, 2025 21:47

Planning Adviser Wahiduddin Mahmud on Tuesday termed the budget placed by the interim government "realistic and frugal'.

"I will tell this budget realistic and frugal, aiming to ensure a fragile economy into a stable one where all financial institutions and all other state organisations were demolished," he said while addressing a post-budget press conference held at Osmani Memorial Auditorium.

He said that they are having heavy trouble cleaning the garbage that was left behind by the previous Awami League government.

The adviser said that the new projects that are being taken up by this government would come to the implementation stage not in the coming 2025-26 fiscal, but in 2026-27 fiscal.

"These projects will be enlisted now, there will be some more tasks to be done for these projects to improve these, the time to implement these projects will come not in the proposed budget time (2025-26 fiscal), these projects will be implemented in 2026-27 fiscal," he said.

He also said that at that time, this interim government would not be in power.

"The government, which will be in power then, if they want they can pick projects from those enlisted ones," he said.

The adviser, however, admitted that the poverty in the country has increased. "We are trying to know the reasons to solve those," he said.

He said this is the first time such a system has been put in place where a project must be at the forefront of the ongoing permanent irregularities (IMED) survey.

He said that many projects have been implemented without any kind of trial analysis, the work of which is being spent twice as much.

There are many projects where major corruption has occurred. In the future, IMED will be involved in the ongoing project survey to prevent corruption."

The adviser said that the permanent procurement policy has been revised and passed. Through this, 100% e-tendering will be effective to ensure transparency.

Energy Adviser Muhammad Fouzul Kabir Khan said that this budget is the budget to reduce the inconsistency.

"This is an exceptional budget and the budget to reduce wastage," he added

Wahiduddin said that a significant portion of the proposed national budget has been allocated for servicing both foreign and domestic debt obligations, alongside maintaining essential subsidies in the agriculture and energy sectors.

He noted that these measures were necessary to ensure social stability and contain inflation, which had been rising even before the current administration assumed office.

"We have cleared significant backlogs in energy payments to foreign creditors," he said, adding, "But escaping the vicious cycle of borrowing to repay debt will not be possible in a single budget. What we have done is lay the groundwork for that transition."

The adviser also pointed out that the majority of the development expenditure in the upcoming fiscal year is tied to ongoing projects initiated by the previous government-many of which, he said, lacked proper financial planning and strategic prioritisation.

"Out of 1,113 development projects, only 20 to 30 are new-and even those were listed in the 'green page' of last year's budget without any allocation," he said.

According to the adviser, the interim administration's role has largely been to rationalise, restructure, and expedite the completion of feasible projects. Abruptly halting large infrastructure schemes mid-construction, he warned, would cause greater economic harm.

"Instead, we've prioritised rural infrastructure such as roads and bridges, along with urban services like sanitation and water management in district towns and semi-urban areas," he said.

These efforts, he added, aim to improve livability and reduce urban congestion by promoting decentralised development.

Regarding mega projects, the government is selectively focusing on economically strategic infrastructure such as the Matarbari Deep Sea Port, Chattogram Bay Terminal, and Khulna-Mongla Port.

"These are not merely construction projects-they are gateways to boosting our trade potential," the adviser said. "Even here, we are making careful budget adjustments to reduce costs wherever possible."

He also highlighted steps to reduce dependence on imported LNG by reviving and expanding domestic gas exploration-moves that he said are long overdue and could significantly cut energy import bills in the future.​

 

[Saif]

Budget framed within means for easing life: Salehuddin

This budget is framed realistically within the means and for easing people's life, sans growth hypes of yesteryears, interim government's high-ups said to defend its maiden budgetary measures with curtailed spending on fund-guzzling development schemes. At a post-budget press meet Tuesday at the

thefinancialexpress.com.bd

Budget framed within means for easing life: Salehuddin
Interim govt defends its maiden budget with curtailed spending on fund-guzzling dev schemes

Jasim Uddin Haroon
Published :
Jun 04, 2025 01:13
Updated :
Jun 04, 2025 01:13

Finance Adviser Dr Salehuddin Ahmed addresses a post-budget press conference at the Osmani Memorial Auditorium in the capital on Tuesday. Planning Adviser Dr Wahiduddin Mahmud is seen on his right. — FE Photo

This budget is framed realistically within the means and for easing people's life, sans growth hypes of yesteryears, interim government's high-ups said to defend its maiden budgetary measures with curtailed spending on fund-guzzling development schemes.

At a post-budget press meet Tuesday at the Osmani Memorial Auditorium in Dhaka, Finance Adviser Dr Salehuddin Ahmed said the proposed national budget for 2025-26 is "realistic, pragmatic and implementable" in the present context.

He noted that the interim government inherited a financial sector in near-collapse when it assumed office in August 2024.

"The country was in the ICU (Intensive Care Unit) especially the financial sector," he told inquisitive finance reporters.

"You will hardly find another case in the world where banks' sponsors siphoned off nearly 70 per cent of funds, including depositors' money."

The press event was attended by other key members of the interim cabinet, including Commerce Adviser Sheikh Bashiruddin, Agriculture and Home Adviser Lt-General (Retd.) Jahangir Alam Chowdhury, Planning Adviser Dr Wahiduddin Mahmud and Power and Energy Adviser Dr Fouzul Kabir Khan, Cabinet Secretary Dr Sheikh Abdur Rashid, Finance Secretary Dr Md. Khairuzzaman Majumder, NBR Chairman Md. Abdur Rahman Khan and Bangladesh Bank Governor Dr Ahsan H. Mansur.

The finance adviser said the country had been "on the edge of an abyss," particularly in financial governance, when the interim administration took over.

"What would have happened had we not intervened? We've made efforts to bring the economy back into a relatively stable position."

He acknowledges that repatriating stolen money takes time.

"Look at the Philippines -- it took them 18 years to recover the looted assets of Ferdinand Marcos. But the process has begun here," he mentioned, without disclosing specific details.

On budgeting strategy, Dr Ahmed notes that resources are limited, but demand is enormous. "In economics, there's the theory of Pareto Optimality -- improving one person's welfare often requires compromising another's. We tried to strike a balance."

He said the focus now shifted from a narrative of high growth to inclusive wellbeing.

"For years, we heard about GDP growth. But who really benefited from it? Our goal this time is to improve people's standard of living, enhance purchasing power, and allow businesses to breathe."

Despite multiple structural challenges -- inflation, revenue shortfalls, energy crises, and a troubled banking system -- the budget size remains unchanged.

"We didn't prepare a revolutionary budget, but we laid the foundation for realistic transformation," Dr. Ahmed said.

Planning Adviser Dr Wahiduddin Mahmud points out a key concern -- debt servicing -- stemming from debt buildups over the years heretofore.

"A significant portion of this budget is earmarked for interest payments, both domestic and external. We're caught in a debt trap, and we must find a way out."

To underscore prudence that went into the budgeting he said the current Annual Development Programme (ADP) inlaid in the budget for the forthcoming financial year 2025-26 includes over 1,100 projects with very few new ones.

"Most of the so-called 'new' projects were actually initiated by the previous government and were already in the Green Book," he told the journalists.

Efforts are underway to rationalise spending, given the prevailing context.

"We've already trimmed down the Mongla Port project, implemented by a Chinese firm, by Tk 5.0 billion -- from Tk 40 billion," he said as an example of austerity.

"We're essentially clearing the garbage left behind by the previous regime."

Dr Mahmud also criticised the Payra Port project, which lacks essential transmission systems despite having two coal-based power plants.

"We can't scrap it altogether due to prior investments."

To improve transparency, the government is drafting a Public Procurement Act, the planning adviser said.

"Right now, only three to four firms dominate government construction. This act will bring accountability."

He also announced that the Implementation Monitoring and Evaluation Division (IMED) would become more active than in the past, for oversights on public-works projects.

"They [IMED officials] will physically visit ongoing projects to monitor progress, and misuse," he said.

Agriculture and Home Adviser Lt-General (Retd) Jahangir Alam Chowdhury said bumper harvests of Boro rice, potatoes, and onions this year created surpluses on the market, leading to lack of fair prices for the farmers.

However, for a lack of cold storage, farmers are often forced to sell at depressed prices.

"We're constructing 100 small cold storages tailored for vegetables, including cauliflower, which require specialised temperature conditions," he mentioned.

Four additional storage facilities are being developed specifically for seed potatoes, which require different temperatures.

Finance Secretary Dr Md. Khairuzzaman Majumder said the government is seeking to reduce its dependence on the banking sector to avoid crowding-out effect on private investment.

"Last year, bank borrowing was initially projected at Tk 1.37 trillion. After consultation with the central bank governor, we revised it down to Tk 990 billion," he told the press meet.​

 

[Saif]

Budget not consistent with July spirit of equity, employment: CPD

Economic-policy analysts at the CPD see the interim government's maiden budget paradoxical to July spirit of equity for its customary fiscal measures and take exception to the black-money-whitening provision in particular. The Centre for Policy Dialogue (CPD) says although the proposed budge

thefinancialexpress.com.bd

Budget not consistent with July spirit of equity, employment: CPD

FE REPORT
Published :
Jun 04, 2025 01:14
Updated :
Jun 04, 2025 01:14

Economic-policy analysts at the CPD see the interim government's maiden budget paradoxical to July spirit of equity for its customary fiscal measures and take exception to the black-money-whitening provision in particular.

The Centre for Policy Dialogue (CPD) says although the proposed budget for the next fiscal year makes ambitious promises-such as reducing inequality, creating jobs through increased investment, and prioritizing human development over mere GDP growth-these commitments are not reflected in the actual allocations and initiatives.

They also note that the budget, formulated at a critical juncture, on the cusp of a political changeover, offered an opportunity for establishing tax fairness, boosting revenue collection, and initiating major reforms with genuine intent to address the fragile economy. But the government "failed" to seize it.

The remarks were made Tuesday from a media briefing titled 'CPD's Analysis of the National Budget FY2025-26', held at a hotel in the capital to present a detailed analysis of the proposed budget.

Professor Mustafizur Rahman, Distinguished Fellow at the CPD, said the proposed budget also fails to address another core demand of the July movement-employment generation alongside building an inequality-free society.

He notes that the budget lacks a guaranteed employment scheme and falls short of introducing effective measures to integrate the large youth population 'Not in Education, Employment, or Training (NEET)' into the mainstream economy.

"Employment will be created through investment," he said, but while public investment is set to decline slightly, there is also no clear roadmap to boost private investment to meet the budgetary goal.

Earlier on Monday, Finance Adviser Dr Salehuddin Ahmed presented the national budget titled 'Building an Equitable and Sustainable Economic System' to be implemented in the next fiscal year with a total outlay of Tk 7.90 trillion.

Presenting the keynote, Dr Fahmida Khatun criticised the budget, describing it as a remnant of the " autocratic regime that " due to its provision allowing the legalisation of undisclosed money.

Calling for its complete withdrawal she said it "entirely unacceptable" as it undermines the morale of honest taxpayers and effectively penalises law-abiding citizens.

Dr Fahmida notes that the new budget comes at a time of ongoing economic challenges, with macro-indicators showing growing fragility over the past three years.

"While some policies have brought limited stability, the budget's key focus should be on curbing persistent inflation and restoring overall economic stability."

Despite some progress in the macroeconomic landscape, she points out, the economy continues to face major challenges, including revenue shortfalls, restrained public spending, low ADP implementation, heavy reliance on bank borrowing, inflationary pressures, high non-performing loans, weak private investment, slowing economic growth, and unmet energy and power demand.

However, some of goals in terms of GDP growth, rising investment, tackling inflation set in the budget would be difficult to get to because of the current status of such indicators.​

 

[Saif]

Money legalisation may be dropped: govt

Finance adviser Salehuddin Ahmed on Tuesday said that they might drop the undisclosed money legalisation facility from the measures proposed in the national budget for the 2025-26 financial year.

www.newagebd.net

Money legalisation may be dropped: govt
Staff Correspondent 03 June, 2025, 23:24

Focus Bangla photo

Finance adviser Salehuddin Ahmed on Tuesday said that they might drop the undisclosed money legalisation facility from the measures proposed in the national budget for the 2025-26 financial year.

‘If you think that the proposed provision is unethical, the matter will be reviewed,’ said the finance adviser at a press briefing in the capital Dhaka, one day after unveiling the first national budget under the interim government.

The budget proposal regarding the legalisation of undisclosed money has drawn criticism from different quarters.

Responding to questions from reporters, he admitted that the proposed measure was not a big deal and was given under compulsion.

The finance adviser was aided by planning adviser Wahiduddin Mahmud, power, energy and mineral resources adviser Muhammad Fouzul Kabir Khan, commerce adviser Sk Bashir Uddin, and home and agriculture adviser Jahangir Alam Chowdhury.

Bangladesh Bank governor Ahsan H Mansur, cabinet secretary Sheikh Abdur Roshid, finance secretary Khairuzzman Mazumder and National Board of Revenue chairman Abdur Rahman were also present on the occasion.

Answering to a question about equity, the finance adviser said that allocations for women, changes in bonded warehouse and tariff rationalisation were linked to ensuring more equitable system.

The finance secretary mentioned the forthcoming measures like appointing employees in the vacant government posts, holding special examinations for recruiting officers under the Bangladesh Civil Service, allocation of Tk 100 crore for start-ups and Tk 125 crore for creation of entrepreneurs as the employment scopes in the budget.

On a query about the recovery of stolen assets, the finance adviser said that they would able to bring back some money in one or two years.

Mentioning the overall process as time consuming and the launderers as clever, he said that he would not have asked budget support from the International Monetary Fund had some of the money stolen during the authoritarian Awami League regime, which was ousted past year in a mass uprising, been already recovered.

Defending the proposed measures in the FY26 budget, the finance adviser said that they had to follow the framework of three years to prepare the budget to keep the policy consistency.

Calling the budget pragmatic and almost rhetoric free, the finance adviser said that they disengaged them from the growth-centric narrative.

Thanking the finance adviser for announcing the budget amid economic recovery, planning adviser Wahiduddin said that a substantial part of the non-development budget was to be spent for the interest payment.

He also said that the proposed budget was an attempt to end the trend of clearing loan liability with taking fresh loans.

While commenting on the budget, the energy adviser, the commerce adviser and the home and agricultural adviser appreciated the finance adviser for helping them to solve problems in their sectors over the past 10 months of the interim government.

The commerce adviser said that they were able to restore comfort on the commodity market while the agriculture adviser said that they were expecting bumper harvest of boro rice.

Highlighting the efforts to stabilise the exchange rate, Bangladesh Bank governor Ahsan H Mansur hoped that the inflation rate would fall below the target of 6.5 per cent in the next financial year.

He also said that the central bank would reduce interest rate once inflation dropped below 7 per cent.​

 

[Saif]

A conservative budget for FY2026

Here’s to hoping that the interim government initiates targeted and critical reforms in FY2026 to improve budget implementation

www.thedailystar.net

A conservative budget for FY2026

VISUAL: SALMAN SAKIB SHAHRYAR

The proposed budget for the 2025-26 fiscal year, worth Tk 7.9 lakh crore, was presented by the finance adviser yesterday, at a time when the country is passing through unusual circumstances—both politically and economically. A non-political, unelected government, the result of the political changeover last year, formulated the budget amid several economic challenges.

On the economic front, despite the fact that several economic indicators show stability returning in nearly 10 months of the interim government, the outlook for investment and employment remains bleak. While some areas of the economy have shown progress to an extent, many other sectors have yet to see positive outcomes. Inflation, which remained over nine percent for 27 consecutive months, is showing a downward trend, reaching 9.05 percent in May 2025. However, there is a silver lining in the external sector. Strong remittance inflows have bolstered the foreign exchange reserves. Export income is also impressive. In the banking sector, several disciplinary measures have been undertaken, stemming the sector's continuous deterioration and easing the widespread panic that once plagued it.

Yet, significant challenges still remain. A new ordinance has been issued to regulate the banking industry, with steps taken to safeguard depositors' interests. The draft Banking Resolution Ordinance, 2025, which is available on the website of the Financial Institutions Division, delineates rules and regulations for improving the ailing banks. These measures are expected to help rebuild investor confidence.

In the current context, the FY2026 budget was expected to address some of the existing challenges. Controlling inflation, tackling investment hurdles, creating employment, and achieving macroeconomic stability are some of the crucial areas to which the government needs to pay attention to. The need for higher investment in human capital development and social protection cannot be ignored either.

Some of the major features of the proposed budget sheds light on the government's priorities.

The size of the FY2026 budget has been reduced by Tk 7,000 crore compared to its predecessor, reflecting a contractionary approach taken by the government to address the persistent economic struggles. The Annual Development Programme (ADP) allocation has been reduced by 13.2 percent compared to the original allocation in the FY2025 budget, which indicates a strategic shift towards fiscal consolidation. The budget deficit is set at 3.62 percent of GDP, which will be financed through domestic borrowing and foreign loans. Setting a lower budget deficit is a wise move in view of high inflation and limited fiscal space.

The revenue collection target for the incoming fiscal year is set at Tk 5.64 lakh crore, a 4.25 percent increase from the outgoing year's original target of Tk 5.41 lakh crore. The National Board of Revenue (NBR) is expected to collect Tk 4.99 lakh crore of this target. However, the revenue authority has historically struggled to meet such targets. Given the trend of revenue collection till March 2025, the deficit could exceed Tk 1 lakh crore by the end of the outgoing fiscal year. A practical and achievable target could improve tax collection predictability. The country's existing tax structure, with a tax-GDP ratio of less than eight percent, limits the government's ability to mobilise resources for development spending.

In view of the persistent inflationary pressure, the new budget proposes to raise the tax-free income threshold for individual taxpayers from Tk 3.5 lakh to Tk 3.75 lakh—but from FY2026-27. The tax measures will not provide much comfort to the low- and middle-income groups. The budget continues to rely on indirect taxes, so it will not effectively reduce the pressure of high inflation on the people. The government should attempt to collect taxes by expanding the tax net and curbing tax evasion. It also needs to undertake reforms to make the tax system more progressive and equitable.

The upcoming budget proposes to introduce some tax policies designed to enhance investment, such as withdrawing or reducing supplementary duties on several products and cutting customs duties on others in order to reduce the cost of doing business. These tax proposals aim to boost market access and trade competitiveness. The budget highlights creating a business-friendly environment to stimulate private investment, which has been sluggish due to high inflation, rising interest rates, and a weak law and order situation. The political upheavals of the July-August mass uprising, and the subsequent disruptions, resulted in further deterioration of the business environment and the overall economic stability. The uncertain political future is discouraging investors. Therefore, success of the economic measures will depend on how effective the political measures are in stabilising the country.

Despite the interim government's commitment to improving human development indicators, the FY2026 budget has reduced ADP allocation for the health sector by Tk 2,535 crore and for the education sector by Tk 2,971 crore compared to the outgoing fiscal year. This raises concerns about the government's ability to improve the quality of education and healthcare services, which are crucial for reducing poverty and enhancing human capital. It is undeniable that investing in people—teachers, students, doctors, nurses—is critical. Allocation for the agriculture sector in the ADP has also been decreased by Tk 2,424 crore, which is concerning from the food security perspective.

During high inflation, social safety net programmes play an important role. However, the efficiency of these programmes has been undermined due to the exclusion of genuinely poor citizens and inclusion of non-poor people. Besides, there are several common programmes that various institutions of the government implement. The budget has proposed reducing the number of such programmes to 95 from about 140 previously, which is a good move.

In the Mid-Term Macroeconomic Policy Statement (MTMPS) for FY2026-FY2028, the government has set the GDP growth target to be 5.5 percent for FY2026 and expects the inflation rate to decline to 6.5 percent. Achieving these targets will depend on addressing the current economic and political challenges and implementing some essential reforms. For example, the institutional reform of the NBR will be critical for meeting the revenue target. The government attempted to undertake such a reform through dissolving the NBR and establishing two new divisions under the finance ministry. However, the initiative has been stalled in the face of protests by NBR employees on administrative issues. It is crucial that this reform is implemented sooner rather than later through broader consultations with the relevant stakeholders to enhance efficiency and transparency in revenue collection.

Since a budget is designed only for a year, there is a limited scope for undertaking deep reforms. However, structural bottlenecks, including fiscal discipline and efficiency through institutional reform, are necessary to deliver budget commitments. Here's to hoping that the interim government will initiate a few targeted and critical reforms in FY2026 to improve budget implementation.

Dr Fahmida Khatun is executive director at the Centre for Policy Dialogue (CPD).​

 

[Saif]

Achieving the ambitious revenue target

The proposed budget for the fiscal year 2025-26, amounting to Tk 7.9 trillion, marks a significant shift in Bangladesh's fiscal objectives: moving away from grand development narratives towards pragmatic restraint and people-centric welfare. While rolling out the budget on Monday, Finance Adviser S

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Achieving the ambitious revenue target
Atiqul Kabir Tuhin

Published :
Jun 05, 2025 01:34
Updated :
Jun 05, 2025 01:34

The proposed budget for the fiscal year 2025-26, amounting to Tk 7.9 trillion, marks a significant shift in Bangladesh's fiscal objectives: moving away from grand development narratives towards pragmatic restraint and people-centric welfare. While rolling out the budget on Monday, Finance Adviser Salehuddin Ahmed conspicuously refrained from announcing ambitious development projects or lofty GDP growth targets. Instead, his focus was squarely on ensuring human development through greater access to public healthcare and quality education, expanding social safety net coverage, and providing fund for innovative entrepreneurs and so on, aimed at building a welfare state in line with the vision of the July Uprising.

However, amid resource constraints and poor revenue collection, the finance adviser had to carefully calibrate a smaller budget, marking the first time a budget proposal has been lower than the previous year's. The proposed outlay is Tk 70 billion less than the current fiscal year's original allocation of Tk 7.97 trillion. While not a drastic cut, the reduction signals an austerity measure in response to a subdued economic outlook marked by high inflation, slack investment growth, liquidity crisis in banks and above all political uncertainty. The government aims to reduce fiscal deficit to around 3.6 per cent of GDP, the lowest level in over a decade, signaling its intent to restore fiscal discipline by reducing budget deficit and boosting domestic revenue collection. The challenge, however, lies in ensuring that this policy of fiscal restraint does not undermine investment in critical sectors such as health, education and job creation.

Meanwhile, financing this smaller budget will be a daunting challenge unless revenue collection improves significantly. The budget sets a revenue target of Tk 5.64 trillion, equivalent to 9 per cent of the gross domestic product (GDP). Of this amount, Tk 4.99 trillion is expected to be mobilised through the National Board of Revenue (NBR), while the remaining Tk 650 billion is projected to come from non-tax revenue sources.

However, a critical question is how will the government achieve the ambitious revenue collection target of Tk 5.64 trillion? Historically, revenue collection has consistently fallen short of targets, with the highest amount collected being Tk 3.75 trillion in FY23. Given the current slowdown in business activity and investment, along with rising unemployment, experts argue that the government's revenue goal is overly ambitious, and likely unattainable under current conditions.

If revenue collection falls short, the budget deficit will widen, which will force the government to increase borrowing from both domestic and foreign sources. The deficit is currently projected at Tk 2.26 trillion, with Tk 1.25 trillion expected from domestic sources and Tk 1.01 trillion from external sources. At this level, the deficit is considered manageable. However, if the shortfall in revenue leads to a higher deficit, the government may be compelled to rely more heavily on commercial bank borrowing, potentially crowding out private investment and pushing up borrowing costs. With treasury bills already offering interest rates of 11-12 per cent, banks are increasingly inclined to invest in government securities rather than lending to private borrowers. So, how will the private sector get adequate access to credit if the government taps deeper into the banking sector? Many suggest the government to take foreign loans at concessional interest rates. However, the country's external debt has already exceeded $100 billion, and the finance adviser has allocated a staggering Tk 1.22 trillion in the budget for interest payments on both domestic and foreign loans. Therefore, reducing government operational expenditure and boosting revenue collection are crucial for achieving sound fiscal management.

Ultimately, it all comes down to how the government will achieve the budget's ambitious revenue growth target of 27.98 per cent for the next fiscal year, especially given its persistent failure to meet revenue targets in the past. Meeting this target will be a significant challenge. However, many argue that the target itself is logical, pointing out that Bangladesh's revenue collection remains far too low relative to the size and growth of its economy. The country's public sector is among the lowest revenue-generating in the world. The country's tax-to-GDP ratio, a key indicator of revenue efficiency, stands at just 7.4 per cent, the lowest not only in South Asia but also among most global economies. In comparison, Nepal and India boast of tax-to-GDP ratios of 23.4 per cent and 20 per cent, respectively. Experts argue that, given the size of Bangladesh's GDP, the tax-to-GDP ratio should be at least 17 per cent. However, this target has remained out of reach due to widespread corruption and inefficiency within the revenue department. In addition, the prevalence of tax evasion remains alarmingly high among the people and businesses.

In a recent interview, the Finance Adviser cited a case in which a taxpayer owed Tk 1 billion in taxes but managed to get away with paying only Tk 100 million as tax-allegedly by bribing a tax commissioner with Tk 600 million and pocketing the remaining Tk 300 million. This is not an isolated incident; similar cases are widespread across the country. Retail VAT evasion, along with tax avoidance in the informal businesses and e-commerce sector, also contributes significantly to revenue losses. It is estimated that over 30 million businesses operate in the country, yet fewer than 2 per cent are registered for VAT. Corruption is also rampant in customs operations. According to one estimate, trade mispricings alone cost Bangladesh approximately $8.27 billion annually between 2009 and 2018. These issues underscore the urgent need for procedural reforms, stronger oversight, and greater accountability within the revenue department.

Recognising these challenges, the government recently took the bold step to dissolve the NBR and create two new entities: the Revenue Policy Division, responsible for tax law formulation and policy, and the Revenue Management Division, tasked with revenue collection and enforcement. This reform aims to enhance accountability, efficiency, and transparency. However, progress in implementing this vital reform measure has been stalled in the face of protests from NBR employees, who have a vested interest in retaining control over both policy formulation and enforcement functions.

Hence, the government's ability to achieve its revenue target depends on implementing the reforms, cracking down on corruption, broadening the tax base and strengthening administrative capacity. Bangladesh's economy stands at a critical crossroads. Success in overcoming revenue challenges will determine not only the country's economic stability but also the realisation of a more equitable and welfare-oriented society.​

 

[Saif]

Proposed budget doesn’t reflect opinions of political parties, public: BNP

The Bangladesh Nationalist Party (BNP) has alleged the interim government has announced the proposed budget for the 2025–26 fiscal year taking opinions from political parties and the public. BNP standing committee member Amir Khasru Mahmud Chowdhury made the allegation during the party’s...

en.prothomalo.com

Proposed budget doesn’t reflect opinions of political parties, public: BNP
Staff Correspondent Dhaka
Updated: 04 Jun 2025, 17: 46

BNP standing committee member Amir Khasru Mahmud Chowdhury talks to the media on 4 June 2025 Prothom Alo

The Bangladesh Nationalist Party (BNP) has alleged the interim government has announced the proposed budget for the 2025–26 fiscal year taking opinions from political parties and the public.

BNP standing committee member Amir Khasru Mahmud Chowdhury made the allegation during the party’s official response to the proposed budget.

The response was presented at the BNP chairperson’s political office in Gulshan, Dhaka on Wednesday afternoon.

Since there is currently no functioning parliament or democratic government in the country, BNP had expected the interim government would formulate the budget through discussions with political parties involved in the anti-fascistmovement, and establishing a minimum level of national consensus, Amir Khasru stated.

The government could have sought opinions from people of various professions, he pointed out.

The BNP leader also said experts, civil society members, business representatives, and youth could also have been included in the process. However, this was not done.

Amir Khasru remarked that had the views of political parties and the public been considered, the budget would not have been unilateral, nonparticipatory, or a continuation of the same conventional pattern.

Amir Khasru said the current inflation rate is nearly ‘double digit’. The government is saying to bring it down to 6.5 per cent, which appears to be unrealistic. The rate of increase in poverty could have been curbed. The World Bank figures show more than 2.7 million people have become more pure in the last 10 months under the interim government.

The BNP leader further said, “According to the Bangladesh Bureau of Statistics, GDP growth in the 2024–25 fiscal was 3.97 per cent. However, in the current budget, it has been projected at 5.6 per cent, which, like previous governments, is unrealistic and merely growth on paper.”

“Food security is under threat. The attempt to show an increase in allocation by including pensions and agricultural subsidies under the inadequate, flawed, and corruption-ridden social safety net sector is misleading. Nevertheless, government allocation for social protection remains insufficient.”

Amir Khasru remarked that the reduction in allocation for vital sectors such as education, healthcare, and agriculture is a cause for concern. He stated that private universities, medical colleges, colleges, and schools could have been brought under full tax exemption. He added that, if the BNP comes to power in the future, these areas of education will be brought under full tax exemption.

Amir Khasru stated that the budget should have included a clear roadmap to address the weaknesses in the economic framework.

He said the primary focus should have been on presenting a strategy for increasing private investment, establishing industries, and creating employment as part of economic recovery.

Priority should have been given to education, healthcare, and agriculture. It was essential to foster new entrepreneurs by supporting small, cottage, and medium-sized enterprises. The high interest rates, coupled with increased taxes and duties, will place significant pressure on industries—particularly the productive sectors.

Many businesses may be forced to shut down, leading to reduced employment opportunities. If financial pressure on the middle and lower-income classes increases, it could fuel economic instability. Progress in poverty alleviation may also come to a halt.

Amir Khasru stated that the budget lacks any specific plans to reduce the cost of doing business, cut bureaucratic red tape, or lower the overall expenses of business operations. As a result, he said, entrepreneurs will face an uncertain and unfavourable environment.

He also pointed out that the increase in duties on online businesses will put pressure on digital entrepreneurs. According to him, this will lead to greater frustration among young entrepreneurs and discourage innovation.

Amir Khasru said the banking sector is in a fragile state. Initiatives to realise default loans, bring back laundered money and to expand the tax net could set a new basement in tax collection. The government is over dependent on the bank.

“Taking loans to clear debts is a threat to economic stability in the long run. The option to whiten black money is a reward for the tax evaders. It’s an injustice for the regular taxpayers. It will affect people’s confidence in the revenue system," Amir Khasru said.

Also present at the press conference were BNP standing committee members Gayeshwar Chandra Roy and Selima Rahman, BNP chairperson’s adviser Ismail Jabiullah, media cell member Shayrul Kabir Khan and press wing member to the chairperson, Shamsuddin Didar.​

 

[Saif]

Opinions of parties, people not reflected in budget: BNP

Calling the interim government's maiden budget conventional, the BNP on Wednesday said the proposed budget for the 2025-26 fiscal year was placed without the opinions of political parties and the people. BNP Standing Committee member Amir Khasru Mahmud Chowdhury said this at a post-budget press co

thefinancialexpress.com.bd

Opinions of parties, people not reflected in budget: BNP

FE REPORT
Published :
Jun 05, 2025 08:31
Updated :
Jun 05, 2025 12:44

Calling the interim government's maiden budget conventional, the BNP on Wednesday said the proposed budget for the 2025-26 fiscal year was placed without the opinions of political parties and the people.

BNP Standing Committee member Amir Khasru Mahmud Chowdhury said this at a post-budget press conference at the party chairperson's Gulshan office in the capital.

He said the budget formulation would not have been one-sided and non-participatory if people's voices were heard.

Khasru said since there is no parliament or democratic government in the country now, the BNP expected that the interim government would formulate the budget by establishing a minimum national consensus after discussing with the political parties and entities that joined the anti-fascist movement.

He said inflation has reached almost double-digits currently.

There are discussions on reducing inflation to 6.5 per cent, which does not seem realistic, he said.

The BNP leader also said according to the Bangladesh Bureau of Statistics (BSS), gross domestic product (GDP) growth in the 2024-25 fiscal year was 3.97 per cent.

Growth was estimated at 5.6 per cent in the new budget. This is also an unrealistic and paper-based projection like the previous government, said Khasru.

He mentioned that reducing allocations for important sectors like education, health, and agriculture is worrying.

Additional taxes and duties along with huge interest rates will create great pressure on industries. Especially the productive sectors would be affected. Many institutions may close.

Employment may also decrease, the BNP leader went on.

If the financial pressure on the middle- and low-income groups increases, economic instability may rise and progress in poverty alleviation may also come to a halt, he added.

Citing the World Bank data, he said more than 2.7 million people have become poorer than before during the interim government's tenure.

He further said the economic growth figures are declining and an elected government can help get out of the situation.

Khasru mentioned that digital entrepreneurs would come under pressure due to the increased taxes on online businesses.

This would increase the frustration of young entrepreneurs, he said.

He also said the financial condition of banks is fragile.

Taking steps like recovering default loans and laundered money, as well as expanding the tax net would create a new foundation for revenue collection, said the BNP leader.

The government is heavily dependent on the banking sector, he said, adding that repaying debts by taking on more debts, allowing the whitening of black money, and over-dependency on banks are threats towards a sustainable economy.

Referring to the facilities the readymade garment sector is enjoying due to measures taken by late president Ziaur Rahman, he said if the BNP comes to power, it would give such facilities to some other sectors to help expand the economy and diversify the export basket.​

 

[Saif]

Few measures may raise business costs, deter investment: ICAB

Chartered accountants on Wednesday raised concerns that several proposed fiscal measures in the FY26 budget may lead to higher costs for businesses and reduced private-sector investment, especially amid the ongoing economic uncertainties. At a press conference held at its office in the capital, th

thefinancialexpress.com.bd

FY ’26 Post-budget reactions
Few measures may raise business costs, deter investment: ICAB
Rise in minimum tax main issue
FE REPORT
Published :
Jun 05, 2025 08:27
Updated :
Jun 05, 2025 08:27

Chartered accountants on Wednesday raised concerns that several proposed fiscal measures in the FY26 budget may lead to higher costs for businesses and reduced private-sector investment, especially amid the ongoing economic uncertainties.

At a press conference held at its office in the capital, the Institute of Chartered Accountants of Bangladesh (ICAB) said some measures show promise, especially those aiming at digitisation and administrative simplification, but others may raise the cost of doing business and deter private sector growth.

It urged the government to have a broader dialogue among policymakers, industry leaders, and financial professionals, saying it is essential to refine the budget for sustainable economic recovery and growth.

ICAB President Maria Howlader lauded a landmark inclusion in the budget - the government's recognition of women's unpaid household labour as a contributor to the gross domestic product (GDP) - which she described as a "major policy change".

She expressed concerns about the feasibility of achieving the revenue target without modernising the tax structure and expanding the tax net.

As for individual taxation, she criticised the minimal increase in the tax-free income limit - from Tk 3,50,000 to Tk 3,75,000 - and the rise in minimum tax for marginal taxpayers from Tk 3,000 to Tk 5,000. She urged a higher tax-free threshold of Tk 4,50,000 to offer relief to low-income earners and emphasised the need for a more progressive and equitable tax regime.

Maria opposed the increase in turnover tax to 1 per cent, stating that taxing turnover instead of profit is inconsistent with a fair tax policy.

However, she welcomed other proposals to boost private investment and reduce business costs, including the removal or reduction of supplementary duties and tariffs on several products.

She also appreciated tax measures to rationalise the effective tax rate, including adjustments for bad debts as per IAS/IFRS standards, quarterly filing of withholding tax return, and reduced tax on brokerage commissions and merchant banks.

As for VAT and customs, she praised reduced advance tax on raw material imports and acceptance of ERP books for VAT purposes, while raising concerns about increased VAT on commercial goods and commissions from online sales.

She also expressed concerns over new regulatory duties on essential and healthcare items.

Commenting on macroeconomic risks, the ICAB president warned that borrowing from domestic sources - 12.25 per cent of the total budget - could fuel inflation, which already stands at over 9.17 per cent.

Snehasish Barua, partner at Snehasish Mahmud & Co, presented the keynote at the event.

He emphasised that inflationary pressures - driven by increased money supply and demand - require urgent containment, stressing the need for enhanced market monitoring and stable supply chains to prevent further price hikes.

Besides, he observed that due to the increase in minimum tax under Section 163 of the Income Tax Ordinance, even companies not making taxable profits will face higher tax burdens.

"For large firms with a substantial turnover, this would significantly increase the cost of doing business. For small businesses, more than 50 per cent of their profits may now go to the government, while loss-making companies could see their tax burden rise by 67 per cent." He said that companies listed on the stock exchanges but with less than 10 per cent of their shares floated through initial public offerings (IPOs) will be taxed at the higher rate of 27.5 per cent, equivalent to private companies.

Snehasish suggested the government extend the same condition to follow-on public offerings (FPOs) for consistency. He noted that Bangladesh already has the highest corporate tax rates among the peer countries, such as Vietnam, Indonesia, and Sri Lanka, for public and private limited companies as well as banking institutions.

"A logical and timely reduction in corporate tax is viewed as essential to encourage business activities and investment during this challenging period."

While reduced tax deducted at source (TDS) rates are expected to boost trading, he said, the increased minimum taxes - up by 67 per cent for companies and nearly 300 per cent for individual businesses - could hinder investment in new projects, ultimately affecting the GDP growth.

He advocated for a faster, digitised customs clearance system and urged the National Board of Revenue (NBR) to adopt international best practices, including easing conditions for participation in the authorised economic operator (AEO) programme to encourage self-compliance.

ICAB Chief Executive Officer Shubhashish Bose said the government refrained from increasing indirect taxes, aligning its policies with the World Trade Organisation (WTO) guidelines.

"Such measures are also part of the broader strategy to prepare for the country's LDC graduation."

He termed the budget a "preparatory blueprint" for Bangladesh's transition to a developing economy, with a focus on long-term sustainability, fiscal discipline, and global competitiveness.

Mohammed Humayun Kabir, vice president of the South Asian Federation of Accountants (SAFA) and past president of ICAB, moderated the discussion.​

 

[Saif]

Poverty spending shrinks in new budget

Despite mounting economic pressures on low-income households, the government has slashed the allocation for poverty reduction in the proposed national budget for FY2025-26, raising concerns among economists and development experts about the direction of fiscal priorities. The proposed budg

thefinancialexpress.com.bd

Poverty spending shrinks in new budget
Economists warn of 'mistimed retreat' amid soaring inflation, sluggish growth

JAHIDUL ISLAM
Published :
Jun 12, 2025 01:10
Updated :
Jun 12, 2025 01:10

Despite mounting economic pressures on low-income households, the government has slashed the allocation for poverty reduction in the proposed national budget for FY2025-26, raising concerns among economists and development experts about the direction of fiscal priorities.

The proposed budget earmarks Tk 4.48 trillion for poverty reduction, down from Tk 4.61 trillion in the original budget for the outgoing fiscal year.

As a share of the total budget, poverty-focused spending has decreased from 57.9 per cent to 56.77 per cent, according to a Finance Division summary titled "Poverty Reducing Expenditure."

In absolute terms, this marks a nominal cut of Tk 129.94 billion in poverty-related allocations within a single fiscal year. The decline in budget share amounts to 1.13 percentage point year-on-year.

A longer-term view shows an even more concerning trend. The revised budget for FY 2023-24 allocated Tk 4.33 trillion-60.66 per cent of the total outlay-for poverty reduction.

Over just two years, the share of poverty-related spending has dropped by 3.89 percentage points, signaling what many see as a waning policy emphasis on poverty alleviation.

Economists warn that this shift comes at a particularly vulnerable time. With persistently high inflation, weak investment, and a slow recovery in employment, lower-income groups are under increasing stress.

Yet the new budget appears to reduce, rather than strengthen, the fiscal support aimed at them.

"It is disappointing that the announced budget, unveiled amid high inflation and a slowdown in investment and employment, has reduced rather than increased support for the poor-falling short of the rising demand for expanded benefits to protect vulnerable populations," said Dr Mustafa K. Mujeri, former Director General of the Bangladesh Institute of Development Studies (BIDS).

He expressed concern that much of the allocation may not reach its intended beneficiaries due to inefficiencies in targeting and implementation.

He emphasised the need for greater direct support for the poor through social safety nets, such as cash transfers and subsidised food distribution.

The national budget for FY 2025-26, proposed by Finance Advisor Dr Salehuddin Ahmed on June 2, includes Tk 3.01 trillion in direct poverty reduction spending, or 38.10 per cent of the total budget, and Tk 1.47 trillion (18.66 per cent) in indirect spending with potential poverty alleviation impact.

This marks a decline from last year's original budget, where direct and indirect poverty reduction shares stood at 38.88 per cent and 19.02 per cent respectively.

According to the Finance Division, Tk 2.84 trillion-or 53.06 per cent of the Tk 5.35 trillion operating budget-is considered poverty-reducing expenditure. An additional Tk 1.63 trillion, or 66.46 per cent of the Tk 2.46 trillion development budget, is similarly classified.

Budget documents reveal that the Ministry of Food will receive the largest poverty-focused share of its allocation, 98.01 per cent, followed by the Bridges Division (94.04 per cent) and the Statistics and Informatics Division (90.44 per cent).

Other high-ranking ministries include the Ministry of Disaster Management and Relief (88.43 per cent), Ministry of Railways (87.66 per cent), and Ministry of Primary and Mass Education (87.22 per cent).

On the other end of the spectrum, several government institutions show negligible or no poverty-focused allocations. The President's Office and the Office of the Comptroller and Auditor General received zero per cent, while the National Parliament received just 0.25 per cent.

Other low-ranking agencies include the Supreme Court of Bangladesh, Economic Relations Division, and the Anti-Corruption Commission.

Dr Selim Raihan, Professor of Economics at Dhaka University and Executive Director of the South Asian Network on Economic Modeling (SANEM), was more critical of the classification itself.

"Who is this report being made to satisfy?" he asked, calling the poverty-reduction label "arbitrary and ad hoc."

He argued that only well-targeted social protection programmes can be considered direct poverty reduction, while broader development investments-though important-should not be lumped together without clear methodological justification.

Raihan also pointed out that economic growth in recent years has not translated into proportionate income growth, and poverty levels have not declined as expected.

He warned that unless poverty spending is restructured and better targeted, the budget risks failing the very people it claims to support.​

 

[Saif]

In quest of a practical budget

The annual budget of the government is the most crucial fiscal event which has a bearing on the living conditions of all social groups. It is the main conduit of national resource mobilisation and management. Every year in June, the country receives its annual national budget for the upcoming

thefinancialexpress.com.bd

In quest of a practical budget

Asjadul Kibria
Published :
Jun 14, 2025 22:46
Updated :
Jun 14, 2025 22:46

The annual budget of the government is the most crucial fiscal event which has a bearing on the living conditions of all social groups. It is the main conduit of national resource mobilisation and management. Every year in June, the country receives its annual national budget for the upcoming fiscal year. After unveiling the budget by the man-in-change of national exchequer, different stakeholders scrutinise the various fiscal proposals placed in the budget. They also submit their suggestions and demands for the inclusion or exclusion of specific measures. Finally, the proposed budget receives approval from the parliament with or without some amendments. Thus, the proposed budget becomes the original budget.

Besides placing the budget proposal for the new fiscal year, the finance minister also declares a revised budget for the outgoing fiscal year. When the national parliament is operational in the country, he/she also presents a supplementary budget for the approval of the lawmakers.

The general trend in Bangladesh is to revise the proposed or original budget by reducing the original outlay. Ultimately, the size of the actual or implemented budget gets further reduced, mainly due to inefficiency in public spending, coupled with the wrong selection of development projects and inadequate mobilisation of resources. Budgetary decisions are primarily dependent on the availability of resources.

The government has been disclosing the status of the implemented or actual budget since FY09 in the budget document, specifically in the 'Budget in Brief.' This document provides a concise overview of the budget, including key figures and policy priorities. The practice brings some amount of transparency in the case of public spending disclosure and helps analysts and stakeholders get a more realistic picture of the budget.

In the first week of this month, the finance adviser to the interim government unveiled the national budget for the fiscal year 2025-26 (FY26). As there is no parliament in the country, Dr Salehuddin Ahmed, the finance adviser, delivered his budget speech via television and radio. Titled 'Building an Equitable and Sustainable Economic System', his speech nominally outlined the future direction of Bangladesh's economy.

Breaking the tradition of incremental budgets over the last five and a half decades, Salehuddin proposed an outlay of Tk 7.90 trillion for FY26, which is around one per cent lower than the original outlay of Tk 7.97 trillion for FY25. The proposed budget for the next fiscal year, however, is 6.20 per cent higher than the revised budget for the current fiscal year. Nevertheless, the modest increase over the revised budget is also a deviation from the long practice. For the last 15 years, since FY10, the proposed budget for the new fiscal year has shown a double-digit rise over the revised budget of the current fiscal year. Considering the high rate of inflation, the 6.20 per cent increase in the proposed FY26 budget over the revised FY25 budget is also not a hike, in real terms. The annual average rate of inflation stood at 10.13 per cent in May this year.

The reduced outlay of proposed public spending for the next fiscal year is a reflection of reality. During the last decade of the ousted Hasina regime, the annual average rate of hike in the proposed budget was 13.40 per cent. Most of the time, inflated outlay was proposed to widen the misappropriation and misuse of public money. The reduction in the proposed outlay for the next fiscal year could potentially lead to a more efficient allocation of resources, but it also raises concerns about the adequacy of funding for key sectors.

The finance adviser also delivered an abridged speech of around 7,000 words, whereas the original text contained around 17,000 words. The shortened version also helps viewers and listeners maintain their concentration.

Nevertheless, the unnecessary delay in making the budget documents public was a disturbing development, especially for analysts and the media. For many years, budget documents were made public when finance ministers began delivering their budget speeches. The practice is disrupted this time. The transmission started at 3:00 pm, and the finance ministry made the documents public after nearly an hour, without any apparent reason. The media personnel who gathered at the Ministry of Information to collect the budget documents also waited for an hour to obtain the documents. Despite repeated requests, the officials did not distribute the documents, quoting the official instruction to wait until the end of the speech. Over the years, journalists have been urging the government to announce the budget before noon. Regrettably, the Yunus-led interim government stuck to the previous timing of budget presentation.

True, the budget is not a panacea for all financial problems, though it is the most critical instrument of a government to manoeuvre public investment and development activities. In a democratic environment, the nature of the budget-making process should be more people-oriented, and policymakers should pay due attention to ensure that the expectations and aspirations of the people are reflected in the budget. According to some economists, public choice and democracy are interrelated, and the economic interpretation of democracy is that public wants and desires be entertained in the budget.

So, the budget process needs to be judged on the basis of (i) the constitutional obligations of the government, (ii) changes in the domestic political perspectives, and (iii) changes in the global economic environment. Like the previous finance ministers, the finance adviser also tried to comply with these three aspects.

Nevertheless, a budget is also not simply an annual financial statement of the government or a set of documents prepared by the bureaucrats, but rather a political tool which combines political decision-making with bureaucratic procedure. It is the numerical documentation of the government's political ideology, which is to be implemented through a suitable economic framework.

Over the last 16 years, it has been observed that the actual budget spending was, on average, 14 per cent lower than that of the original budget and 11 per cent lower than the revised budget, which is the budget that has been adjusted after the initial proposal to account for any changes or new information. Only the actual or implemented budget of FY11 was around 3 per cent and 1.5 per cent lower than the original and revised budgets of the year, respectively.

As the final implementation of the budget is generally lower than the proposed or revised outlay, it implies a structural weakness in the country's public expenditure system. This has led to some critical areas being deprived of due allocation or public investment, while some less important sectors are flooded with funds. The FY26 budget is a modest attempt to deviate from this trend. Its success, however, will depend significantly on the actions of the democratically elected government in the near future, underscoring the importance of their role in the budgeting process.​

 

[Saif]

Bangladesh's austerity budget at a challenging time

The Interim government presented its annual budget on June 2, with a total outlay of TK7.9 trillion which is 0.88 per cent lower than the outgoing budget, and a revenue target of TK5.64 trillion resulting in a budget deficit of TK 2.26 trillion. It is a trimmed budget relative to budgets presented

thefinancialexpress.com.bd

Bangladesh's austerity budget at a challenging time

Muhammad Mahmood
Published :
Jun 14, 2025 22:41
Updated :
Jun 14, 2025 22:41

The Interim government presented its annual budget on June 2, with a total outlay of TK7.9 trillion which is 0.88 per cent lower than the outgoing budget, and a revenue target of TK5.64 trillion resulting in a budget deficit of TK 2.26 trillion. It is a trimmed budget relative to budgets presented in previous years reflecting stark economic reality facing the country. The economy is facing a combination of slow growth, high inflation, and rising unemployment notwithstanding the impending political changeover.

Even after almost ten months in power, there remains a sense of unease about the future as to whether the interim government under the leadership Nobel Laureate Professor Mohammad Yunus can get the economy back on track while spearheading political reforms needed to rebuild a durable democratic system and prevent another dictator from emerging. The economic factor will ultimately be the key issue in determining the interim government's success. It is a monumental challenge.

The finance Advisor in defending his austere budget said the budget "is realistic, pragmatic and implementable' in the current economic context. Such a scaled down "responsible" budget most likely will receive positive nod from the IMF and the World Bank if not from the economically disadvantaged section of the population.

The measures to reduce the budget deficit have resulted in a decrease in annual development expenditure, set at Tk 2.3 trillion, which is a 13.2 per cent decline from the original allocation in the previous budget. The proposed fiscal deficit of TK1.25 trillion will further balloon the already accumulated public debt despite the austerity measures.

In 2024, Bangladesh's public debt was $181,008 million. This amount represented 40.13 per cent of Bangladesh's GDP. Bangladesh's debt per capita in 2024 was $1,056. The public debt is composed of domestic debt (56 per cent of total debt) and external debt (44 per cent). Bangladesh's Private debt and household debt debts stand at 36.92 per cent and 6.69 per cent respectively of GDP in 2025.

Now the debt/GDP ratio is also expected to rise further at the end of fiscal 2025-26. Because debt is a stock rather than a flow, it is measured as of a given date, usually the last day of the fiscal year. Interest payment will account for 22 per cent of total revenue budget or 15.5 per cent of total spending. Between 1979-80 and 2024-25, Bangladesh always ran budget deficits except for four years. It indicates the budget has a structural deficit problem rather than cyclical.

The debt/GDP ratio for Bangladesh is notably lower when compared to the United States at 125 per cent, the United Kingdom at 105 per cent, and Japan at 270 per cent. If output falls sharply and the deficit grows, the debt/GDP ratio for Bangladesh will further climb up. Only budget surplus or high economic growth can help reduce the debt/GDP ratio.

The government also increased subsidy spendings to deal with rising oil, gas and fertiliser prices amounting to 11.3 per cent of budget expenditure. In the present situation, continuous dependence on existing energy and food subsidies will restrict adjustments in domestic prices and hinder fiscal measures from promptly addressing any significant economic challenges that may emerge in the coming months or years. Therefore, it is imperative that the emergency economic support does not become deeply ingrained.

A structural deficit problem implies that even allowing cyclical fluctuations in the economy, current government spending is being financed by borrowing. With structural deficit, therefore, a deficit will be posted regardless of the strength of the economy. A structural deficit problem implies that borrowing will become increasingly unsustainable or more expensive. A structural deficit problem can lead to a rise in interest payments as a percentage of GDP which means increasing amount of tax revenue would be needed to make debt interest payments.

Only spending cuts or raising revenue or both are methods that can get rid of structural deficits. But neither of these methods are appealing to any government and that is why structural deficits continue to linger. More importantly, spending cuts and tax concessions combined can also create a challenge more existential than fiscal. Therefore, the government could reform the taxation regime to solve the structural deficit problem. The current budget does not address that issue significantly.

This budget further demonstrates that Bangladesh is trapped in highly bureaucratised budgetary system with deep structural impediments. A notable example is the longstanding budgetary practice that still provides opportunities to legalise laundered money. This budget is no different in this regard. There also appears to be an inability to reform the taxation system which remains a critical issue for a long time.

10.2 per cent of budget allocation went for the public administration up by 1 percentage point along with increased special benefits for public servants who are set to receive a "special benefit" of up to 15 per cent on their basic salary. It remains unclear what productivity gains were achieved by public servants that justified an increased allocation. Also, the public service in Bangladesh is not known for efficiency. In fact, the public service in Bangladesh is highly bloated, inefficient and also known to be corrupt.

The Budget has allocated Tk 89.2 trillion for subsidies. While energy remains the primary focus, subsidies allocated for fertiliser, mechanisation, and food assistance remain in place as before. Continued reliance on existing energy and food subsidies will constrain adjustments in domestic prices, subsequently limiting the effectiveness of fiscal measures in addressing potential economic challenges that may occur in the coming months or years. Emergency economic support should not become permanent.

The budget has set a GDP growth rate target of 5.5 per cent for the fiscal year 2025-26 against a realised GDP growth rate of 3.97 per cent for the current fiscal year and an inflation target of 6.5 per cent. However, such a growth projection comes at a time when all major economies are facing a downturn, the US is set to suffer the sharpest drop. The OECD predicts US growth will slow from 2.8 per cent in 2024 to 1.6 per cent in 2025 and 1.5 per cent in 2026. The OECD further said, "This reflects the substantial increase in the effective tariff rate on imports and retaliation from some trading partners, high economic policy uncertainty, a significant slowdown in net immigration, and a sizeable reduction in the federal workforce." The inflation target appears challenging based on the experience of the past few years as well as the current economic and political climate.

An economic slowdown in developed countries is concerning for developing countries like Bangladesh, which depend on exports to wealthy regions such as the US, UK, and EU. Economic slowdown in these countries will hit Bangladesh hard. It is also to be noted that all developing countries including Bangladesh are at the receiving end of the advanced economies macroeconomic policy consequences. The budget document does not indicate that the Bangladesh economy may experience a significant slowdown, recession, or stagflation. Rather the picture painted is just the opposite.

According to the World Bank during the interim government's tenure, more than 2.7 million people have become new-poor. Of these, 1.8 million are women. Wages have not kept up with inflation, reducing real incomes. High inflation and increasing unemployment are indicators of an economy potentially experiencing stagflation. Domestic and foreign investment are stagnant, and income inequality is increasing, further worsening economic turmoil.

For a trade dependent country like Bangladesh, budget deficits can boost inflation considerably. Also, fiscal deficits can widen the current account deficit and push up interest rates. An appreciating US dollar as reflected in the BDT/USD exchange rate will make debt repayment or buying commodities even more expensive.

The budget includes measures designed to prepare the economy for becoming a lower-middle income country by November of next year. With that objective in mind, the tariff structure has been simplified by reducing tariffs and removing supplementary and regulatory duties on a very large number of goods rather than introducing a simplified tariff rate across the board. Despite design limitations, this is a positive step towards creating a more competitive environment in the country which is the key to productivity growth.

The principal fiscal challenge facing Bangladesh needs to be viewed in the context of high inflation, rising unemployment, poverty and income inequality and falling to stagnant investment both domestic and foreign. This fiscal year's budget prioritises debt servicing over public welfare. Structural reforms are necessary and have been recognised for a long time as crucial. But the budget appears to be business-as-usual type without any attempt to undertake structural reforms needed to revamp the economy.​

 

[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.​