Finance adviser Salehuddin Ahmed is set to present the budget for the 2025–26 fiscal year today, Monday, taking into account the harsh realities of the economy. The pre-recorded budget speech will be broadcast at 3:00 pm today, on Bangladesh Television (BTV) and Bangladesh Betar.
This will be the country’s 54th national budget and the first under the interim government led by Professor Muhammad Yunus. Following approval by the President, the finance bill will be issued by the end of June with the necessary amendments. As in previous years, it will come into effect on 1 July.
In an interview with Prothom Alo on 25 May ahead of the budget, finance adviser Salehuddin Ahmed said, “I am preparing the budget with the aim of ensuring that everyone benefits from economic growth. This will be a budget focused on improving people’s lives and livelihoods. It will be realistic, welfare-oriented, and based on equality.”
The budget size had been increasing by more than 10 per cent annually, but last year it rose by less than 5 per cent. This time, it is being reduced. Former finance minister Abul Hassan Mahmood Ali had announced a Tk 7.97 trillion budget for the current 2024–25 fiscal year, while Salehuddin Ahmed is now set to propose a Tk 7.9 trillion budget.
Budget statistics
Sources in the finance division said the inflation target for the next fiscal year is set at 6.5 per cent, while the GDP growth target is 5.25 per cent. Alongside a reduction in the overall budget size, the Annual Development Programme (ADP) is also being cut—by Tk 350 billion—bringing it down to Tk 2.3 trillion.
The upcoming budget allocates around Tk 1.2 trillion for social safety programmes, slightly less than in the current fiscal year. Some existing programmes will no longer be included under the social safety net. The government is also expected to spend more than Tk 1 trillion on interest payments in the next fiscal year.
According to the finance division, the interest expenditure target is set at Tk 1.15 trillion. The budget deficit will be 4.25 per cent of GDP. Allocations for salaries and allowances of government employees are expected to reach Tk 970 billion.
The revenue budget is set to increase slightly, with the target likely to rise to Tk 5.64 trillion. The National Board of Revenue (NBR) has been tasked with collecting Tk 4.99 trillion. Subsidy allocations are also expected to rise. Despite pressure from the IMF, subsidies for electricity and fertiliser purchases may see a modest increase to Tk 1.16 trillion.
Policy changes that are coming
In the next fiscal year, a 15 per cent dearness allowance may be announced for government officials and employees in grades 1 to 9, and a 20 per cent allowance for those in grades 10 to 20.
Allowances under eight ongoing social safety net programmes are being increased by Tk 50 to Tk 150 to improve the standard of living for the elderly, widows, persons with disabilities, the visually impaired, and marginalised communities. As part of a new initiative to improve the living standards of tea workers, a monthly stipend may be introduced for their children.
The budget also includes provisions to temporarily take over certain private banks under government ownership. Additionally, the government is considering monthly allowances, alongside a one-time payment, for the families of the July martyrs and those injured.
The interim government is also expanding the food safety programme. Currently, five million families receive subsidised rice under the programme. In the next fiscal year, this number is expected to rise to 5.5 million families. Moreover, the distribution period is being extended from five months to six months per year.
Corporate tax may also increase. For companies not listed on the stock exchange, the corporate tax rate could rise by 2.5 percentage points to 27.5 per cent.
At present, companies with an annual turnover exceeding Tk 30 million must pay a minimum tax of 0.6 per cent, regardless of profit or loss. This may be increased to 1 per cent.
The tax on land purchases is likely to be revised to 6, 4, and 3 per cent depending on the area, down from the current rates of 8, 6, and 4 per cent. Although the opportunity to legalise undisclosed income through the purchase of flats and land will continue, the applicable tax rates may increase significantly based on location.
Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD) and head of the White Paper Committee on economy, told Prothom Alo that the finance adviser missed an opportunity to offer an economic roadmap in the budget.
“No adequate steps were taken to correct the distorted narrative of development presented by the previous government. As a result, this budget remains conventional,” he stated.
Debapriya added that, unfortunately, there would be no surprises this year either.