The government is preparing the budget for the 2025–26 fiscal year with inflation control as its top priority. Employment opportunities will be created in the rural areas, particularly through activities in rural infrastructure such as road construction and renovation. However, no major projects will be taken up, and there will be no oversized Annual Development Programme (ADP).
Allowances under the social safety net will be increased slightly, along with the number of beneficiaries. These steps will be taken within the constraints of limited resources.
This information came from officials involved in budget preparation at the Ministry of Finance. This will be the first budget of the interim government that took office following the July uprising.
Officials said the size of the main budget is being reduced by at least Tk 70 billion compared to the current fiscal year, as no significant new sources of revenue have been identified. The interim government is steering clear of ambitious targets and aiming instead for a realistic budget.
With inflation currently hovering around 9–10 per cent, the new budget is expected to aim for a reduction to 6.5 per cent. Initially, the target was set at 7 per cent by the end of the next fiscal year. The government believes the rate will drop further, as Bangladesh Bank has already taken several measures.
Finance Adviser Salehuddin Ahmed will unveil the budget on 2 June (Monday). Although budgets are usually presented on a Thursday in June, this time the announcement will come earlier in the week. A post-budget press conference with other advisers will be held the following day, as per tradition.
We are going to prepare the budget by giving inflation control the first priority. Apart from this, the focus will be on increasing investment, saving energy and creating employment opportunitiesSalehuddin Ahmed, Finance adviser
To finalise the budget, the financial adviser chaired an online meeting of the Monetary, Currency and Exchange Rate Coordination Council and the Asset Management Committee at the Secretariat on Tuesday. According to meeting sources, the upcoming budget may be set at Tk 7.9 trillion, compared to Tk 7.97 trillion in the current fiscal year.
As there is no parliament at present, the budget will be presented on television and enacted through a Presidential Ordinance. The last time budgets were unveiled this way was during the 2007–08 fiscal year under the previous caretaker government, when the then Finance Adviser AB Mirza Md Azizul Islam made the announcement on television.
Speaking to Prothom Alo, Salehuddin Ahmed said, “We are going to prepare the budget by giving inflation control the first priority. Apart from this, the focus will be on increasing investment, saving energy and creating employment opportunities. Special emphasis will be given to education, health, skill development and information technology. We want people’s lives to be easier.”
Asked how these goals will be achieved, he said, “Revenue will increase in the next fiscal year. However, we will not increase the burden of unnecessary taxes on the people.”
Reducing the budget by Tk 70 billion is merely comparing one assumption to another, given how much of the previous budget remained unimplementedZahid Hussain, former lead economist at the World Bank’s Dhaka Office
Sources said the budget deficit will be kept below 5 per cent of GDP, as in the current fiscal year. The GDP growth target for the next fiscal year is being set at 5.5 per cent. The target for the current fiscal year has already been revised down to 5.25 per cent. However, the World Bank, IMF and ADB projected that growth will remain below 5 per cent.
An allocation of about Tk 2.3 trillion is expected for the ADP. In terms of allocation, more weight will be given to health, education, information technology and social security. The spirit of the July mass uprising and the recommendations of the White Paper Committee and Task Force reports will also be reflected in the budget.
The National Board of Revenue (NBR) may be assigned a revenue collection target of Tk 5.18 trillion for the 2025–26 fiscal year, up from Tk 4.8 trillion in the current budget. However, the target for the current fiscal year has already been revised down to Tk 4.63 trillion.
According to NBR data, revenue collection during the first eight months of the current fiscal year (July–February) stood at Tk 2.21 trillion, falling short of the Tk 2.8 trillion target. This marks a revenue shortfall of Tk 580 billion, or 21 per cent.
Zahid Hussain, former lead economist at the World Bank’s Dhaka Office, told Prothom Alo that even achieving a Tk 4 trillion collection is difficult.
Given that, he said, the next budget will still be ambitious. “The deficit will be large. It won’t be a small budget, nor one aimed at reducing inflation or boosting private sector credit growth,” he said.
Zahid Hussain also commented that reducing the budget by Tk 70 billion is merely comparing one assumption to another, given how much of the previous budget remained unimplemented.
The current interim government has said it plans to reduce total expenditure by Tk 70 billion compared to the previous fiscal year’s budget.
* The report, originally published in the print and online edition of Prothom Alo, has been rewritten in English by Farjana Liakat