[🇧🇩] Budget for 2025- 2026

[Saif]

What the budget says about reforms?

The finance adviser noted a comprehensive package of reform measures for restoring good governance, ensuring institutional accountability, and rebuilding a crumbling financial system.

en.prothomalo.com

What the budget says about reforms?

Staff Correspondent Dhaka
Published: 02 Jun 2025, 18: 16

Finance adviser Salehuddin Ahmed has presented the annual budget for 2025-26 fiscal year, with a comprehensive package of reform measures for restoring good governance, ensuring institutional accountability, and rebuilding a crumbling financial system.

In his budget speech, the finance adviser noted that the institutions have been severely weakened over the past one and a half decades due to widespread corruption and poor governance. He noted the reform commission reports and the interim government’s action plan in this regard.

Tackling corruption and strengthening accountability

Salehuddin Ahmed mentioned that the interim government has initiated amendments to the Anti-Corruption Commission Act, 2004. Between July 2024 and January 2025, 515 corruption cases were registered and 814 charge sheets submitted. Of 144 disposed cases, 59 led to convictions.

In line with the United Nations Convention Against Corruption (UNCAC), steps are being taken to recover laundered money from abroad. Recommendations by the Anti-Corruption Commission Reform Commission and findings from the White Paper on past corruption are being integrated into new policy measures.

Land, judiciary, and electoral reforms

To simplify land-related services and reduce litigation, the government has adopted the 'Land Offences Prevention and Remedy Rules, 2024', and is drafting the 'Land Zoning and Protection Act, 2025'. A digital land management system is being introduced to automate records and registration, leading to improved transparency and revenue collection.

Judicial reforms have also been prioritised. Thirteen monitoring committees comprising 13 High Court judges now oversee subordinate courts to speed up case disposal. The Supreme Court Judicial Appointment Ordinance, 2025 aims to ensure transparency in judicial appointments. An international-standard judicial academy is being established to provide modern training to court officials.

In terms of electoral reforms, the Bangladesh Election Commission has updated the voter list and is using Geographic Information System (GIS) technology to enhance transparency and accuracy. Legal amendments have also been made to prevent manipulation in future elections.

The interim government is also addressing injustices over the student-people movement in 2024. Many politically motivated and fabricated cases filed under the Anti-Terrorism Act and the Cyber Security Act are being withdrawn. To prosecute crimes against humanity committed during that time, the government has enacted the International Crimes (Tribunals) (Amendment) Ordinance, 2024, aligning it with the Rome Statute and international legal norms.

Financial sector reforms

Describing the financial sector as being on the verge of collapse due to 15 years of mismanagement, the finance adviser highlighted sweeping reforms to restore confidence and ensure accountability. The boards of several banks have been restructured, and the Bank Resolution Ordinance, 2025 has been enacted to deal with insolvency and liquidity crises. The Bangladesh Bank Ordinance, 1972 is being amended, and a weak asset management law is in development.

Three task forces are overseeing key aspects of banking reform—assessing asset quality, boosting regulatory capacity, and recovering stolen or laundered funds. Besides, the Bangladesh Bank has formed a financial stability committee to understand the dynamics of the financial sector and determine the steps to be taken to maintain the stability of the financial system.​

 

[Saif]

Budget comes with slim deficit

The interim government on Monday announced the new national budget at Tk 7.9 lakh crore, projecting ambitious revenue-earning measures to keep the deficit at tolerable 3.6 per cent.

www.newagebd.net

Budget comes with slim deficit
Revenue target high, local industries to face competition: economists
Shakhawat Hossain 03 June, 2025, 00:04

The interim government on Monday announced the new national budget at Tk 7.9 lakh crore, projecting ambitious revenue-earning measures to keep the deficit at tolerable 3.6 per cent.

Finance adviser Salehuddin Ahmed, while unveiling the new measures for the financial year 2025-26 in a televised presentation in the absence of Jatiya Sangsad, projected an overall income of Tk 5.64 lakh crore, of which some 88.4 per cent is expected to come via the National Board of Revenue through direct tax, duty and value added tax.

Limiting the undisclosed money investment facility in land and flats with a provision for declaring the source of fund and a steep hike in the tax for investments, the finance adviser also announced cancelling exemption of corporate tax and value added tax for industries.

Announcements have also been made to relax duty on imported products such as refined sugar, petroleum products, buses, minibuses, guns, mortars, rocket launchers, grenade launchers while there would be hike in duty on cosmetics, toys, cell phones, and different types of door locks in an effort to address the tariff rationalisation issue ahead of the country’s graduation from the least developed countries’ block in November 2026.

Economists said that the new tariff measures might force many domestic industries to face a tougher competition and draw criticisms from businesses.

Commenting that some aspects of the financing side of the budget are new, former World Bank Dhaka office chief economist Zahid Hussain observed that the overall revenue income target was highly ambitious.

He apprehended that shortfalls in revenue earnings would compel the interim government to downsize the overall budget or increase borrowings to meet the deficit.

According to him, the expenditure side of the budget is almost usual.

Out of the projected Tk 5.44 lakh crore non-development budget, the highest 22.4 per cent has to be set aside for payment of interest on internal and external borrowings and 19.1 per cent for subsidy and incentives.

The allocation to the public administration will account for 10.2 per cent of the budget, some one percentage point higher than the allocation made in the outgoing budget.

The finance adviser proposed to increase special benefit for the government employees in the new budget to meet the demand for dearness allowance.

Narrating the measures and actions taken over the past 10 months to improve the economic headwinds left behind by the ousted Awami League regime in the wake of a mass uprising, the finance adviser proposed increased rates of allowances under the social safety net programme along with higher allocations to the education and health sectors.

Proposing higher allocations for open market sales and the distribution of subsidised food for card holders against the backdrop of inflation, the finance adviser sanctioned Tk 405 crore for martyrs and injured persons during the July uprising in 2024.

Economists, however, said that the finance adviser had failed to live up to the expectation arising out of the true spirit of the uprising because of giving less focus on employment and investment by private sector businesses.

Demands for reducing inequality and increasing employment by students in the uprising found partial reflection in the budget, said executive director Selim Raihan of South Asian Network on Economic Modelling.

The responses are fragmented and limited, he said, adding that the budget lacked concrete policy guarantees or a road map for creating an investment-friendly environment.

Unlike like previous occasions, the finance adviser did not make any direct projection of GDP growth, inflation and private investment in his budget speech titled ‘Building an Equitable and Sustainable Economic System’.

The target of 5.5 per cent growth in gross domestic product, inflation at 6.5 per cent, and private investment at 24.31 per cent in FY26 are, however, made available in the Medium-Term Outlook of Bangladesh Economy.

Admitting that it is not easy to deal with the instability at the regional and global levels, the finance adviser projected net loans of Tk 96,000 crore from external sources and a net 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.

This is the smallest budget deficit in a decade, largely because of a small annual development programme , worth Tk 2.3 lakh crore, adopted to implement only economically viable projects with main focuses on improving the implementation rate and quality of the projects.

The total new budget outlay is Tk 7,000 crore less than the original size of Tk 7.97 lakh crore announced in June 2024 for the outgoing financial year 2024-25, but higher by Tk 46,000 crore from the revised of Tk 7.44 lakh.​

 

[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.

www.thedailystar.net

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

thefinancialexpress.com.bd

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.​