Budget ‘somewhat conventional’, says financial adviser

Finance adviser Salehuddin Ahmed has acknowledged that the proposed budget for the upcoming 2025–26 fiscal year is “somewhat conventional.”

Speaking at a post-budget press conference at the Osmani Memorial Auditorium in the capital on Tuesday—a day after the budget was presented—he said, “Initially, I think the budget is people-friendly and business-friendly. Many have said that we have followed previous footsteps. In fact, it is not possible to quickly present a revolutionary budget and generate huge revenue.”

The finance adviser also noted that since the proposed budget is smaller than the one for the current fiscal year, its implementation will not be very difficult.

When asked about the provision to legalised black money, Salehuddin Ahmed said, “We will consider it. I am not saying that we have done anything good by giving an opportunity to whiten money.”

The press conference was also attended by planning adviser Wahiduddin Mahmud; agriculture adviser Lt. Gen. (retd) Jahangir Alam Chowdhury; adviser to the Ministry of Power and Energy and Road Transport and Bridges Muhammad Fouzul Kabir Khan; commerce adviser Sheikh Bashiruddin; cabinet secretary Sheikh Abdur Rashid; Bangladesh Bank governor Ahsan H Mansur; finance secretary Md Khairuzzaman Majumder; and National Board of Revenue (NBR) chairman Md Abdur Rahman Khan. Except for cabinet secretary Sheikh Abdur Rashid, all spoke at the event.

The press conference began at 3:00 pm. In the first 30 minutes, the finance and planning advisers elaborated on various aspects of the budget. A question-and-answer session followed and continued until 4:30 pm.

Rather than answering all the questions himself, the finance adviser allowed other advisers, the central bank governor, and the two secretaries to respond.

Although the press conference is typically a two-hour affair, it was abruptly concluded after one and a half hours, leaving many journalists without an opportunity to ask questions.

At the outset, Salehuddin Ahmed said, “Many have said that the country was in the ICU—on the verge of collapse, especially in terms of financial management. If we had not taken responsibility at that time, what would have happened…! Together, we have been able to bring the country to a stable position now.”

He pointed out that the budget had to be formulated in the face of high inflation, banking and energy sector crises, and poor revenue collection. “Resources are limited, while demand is very high.”

There are challenges in sourcing external resources, along with global uncertainties, volatility in the capital market and banking sector, and concerns about law and order. We had to work within this difficult environment.”

Questioning the benefits of the much-touted growth over the years, he added that this budget was designed to improve people’s living standards, enhance purchasing power, and sustain business and trade.

Addressing the newspersons, he said, “We have given the budget amidst so many challenges. Please work with a little compassion for us. We do not want praise—we want to move forward.”

He added that the global perception of Bangladesh is very positive. “We want to strengthen that image. If we ourselves speak negatively, others will too.”

Salehuddin Ahmed rejected the claim that the proposed budget lacks anti-discrimination measures.

He pointed to allocations for women, youth, and startups, as well as other sectors. “Customs duties have been lifted in many areas of business and trade,” he said.

Three advisers spoke directly to the government that will follow the current interim administration, outlining their expectations and the groundwork being laid.

Finance adviser Salehuddin Ahmed said, “The reforms we have initiated are ongoing. We will do as much as we can during our tenure, but we hope to leave a lasting footprint. Hopefully, those who come after us will carry the reforms forward.”

Speaking about development planning, planning adviser Wahiduddin Mahmud noted that the next government will have the strategic freedom to prioritise among various projects. “Whether they choose to focus on infrastructure or emphasise human resource development, education, and health—that will be their decision. At this stage, we are only laying the foundation.”

Commerce adviser Sheikh Bashiruddin added, “If the next elected government continues on our path of reforms, significant progress can be achieved. In this year’s budget, a substantial portion of government expenditure is allocated to loan repayments and interest. Perhaps one day we will be able to frame a budget based on national savings.”

Planning adviser Wahiduddin Mahmud stated that one of the key objectives of the proposed budget is to break free from the debt cycle and correct the mismanagement of development projects inherited from the previous government.

“Almost all the projects currently allocated were initiated by the previous administration,” he said. “Out of 1,300 ongoing projects, only 20 to 30 are new. Since taking office, we have been making cuts and even scrapping some of these projects. We’re essentially cleaning up the mess left behind. Most of these projects were politically motivated, with little consideration for financial viability.”

He emphasised that the proposed budget is both realistic and restrained in its spending approach. “We aim to escape the vicious cycle of borrowing and debt repayment. But this cannot be achieved in a single budget.”

Responding to criticism that the budget is traditional, lacks major reforms, and may not significantly address inequality, Wahiduddin Mahmud explained, “We came in suddenly, with a mandate for just a year or a year and a half. Within this limited time, our primary effort has been to stabilise the economy.”

Bangladesh Bank governor Ahsan H. Mansur stated that inflation and the foreign exchange market remain two major challenges, but progress is visible.

“Inflation has started to come down and may decline to 7 per cent by September,” he said, adding, “The exchange rate has also remained stable, with the US dollar trading between Tk 122 and Tk 123 for the past 7–8 months. This is a matter of some relief.”

While the average inflation target in the 2025–26 budget is set at 6.5 per cent, the governor expressed hope that the actual figure could fall below that.

He noted that food inflation has decreased from 14.5 per cent to 8.5 per cent, and non-food inflation has dropped from 11.5 per cent to just over 9 per cent.

The governor remains optimistic, citing global trends. “Prices of fuel oil, gas, and food products are falling in the international market. Meanwhile, Bangladesh’s export capacity is improving, and the central bank is maintaining a contractionary monetary policy. Overall, inflation may end up lower than the target set in the budget,” he said.

Muhammad Fouzul Kabir Khan, adviser to the Ministry of Road Transport and Bridges, described the new budget as one aimed at reducing waste and inconsistencies.

He emphasised that steps are being taken to curb extortion in the transport sector.

“The Roads and Highways Department is working in coordination with the police. Whenever we hear that passengers are being overcharged during trips to their home villages, immediate action is taken,” he said, noting that a bus owner had recently been fined through a mobile court for such an offense.

He added that recent reductions in electricity and LPG prices, as well as a cut in fuel oil prices, were intended to provide relief to the general public and help lower transport costs.

Finance adviser Salehuddin Ahmed acknowledged the complexity of retrieving laundered funds.

“Money launderers are very sophisticated. They layer their transactions, making recovery difficult and time-consuming. It took Nigeria 20 years to recover laundered assets. This effort is being led by the governor,” he said.

“If we could bring back the laundered money, we would require less budgetary support and possibly wouldn’t need to approach the IMF. Unfortunately, that hasn’t been possible so far,” he stated.

Addressing the controversial issue of legalising undeclared wealth, the financial adviser clarified: “It’s not black money—it’s undisclosed income. A provision has been made specifically for investing in flats or land. There are two aspects to consider: the ethical issue and the practical matter of whether the government receives tax revenue.”

National Board of Revenue (NBR) chairman Md. Abdur Rahman Khan further explained that, unlike previous years, the 2025–26 budget does not offer blanket amnesty for black money. However, two specific provisions have been included, each requiring a higher tax payment.

First, if an individual builds a house on their own land using undeclared income, they can do so by paying double the standard tax. Second, in the case of purchasing a flat, the required tax has been increased fivefold. However, this does not mean immunity from investigation by other agencies.

Agriculture adviser Jahangir Alam Chowdhury said the consumers have been buying potatoes at a cheaper price but the farmers are not getting the fair price for their produce.

He pointed out that people talk about the rights of the consumers more than the rights of the farmers.

The adviser further said that the production of all types of crops is better this year than the previous year. The cold storages are filled with potatoes. Ginger, onion, and maize have seen bumper productions this year.

Stating that vegetables damage within a month in the summer and winter, Jahangir Alam said new cold storages are being constructed to avoid this.

Commerce adviser Sheikh Bashir Uddin said earlier revenue policy used to be fixed through lobbying of various organisations. As a result, some organisations used to get some undue benefits. But none was given such benefits in the revenue policy in this budget. This is a qualitative change.

The commerce adviser further said the previous prime minister herself warned there could be famine in the country in March or April. This suggests that the economy was on the brink. A coordinated effort helped curb the situation.