Following the mass uprising, the BNP has presented its first budget as an elected government. The uprising created significant public expectations, while the period under the interim government also saw extensive discussions on reform programs and consensus among political parties on various issues. Considering both public expectations and the reform agenda, how would you assess this budget?
Selim Raihan: As the first budget of the new government following the February election, it is undoubtedly politically ambitious. The budget speech repeatedly refers to the aspirations of the mass uprising, democratic reconstruction, economic justice, inclusion, good governance, and the rebuilding of state institutions. In this sense, the budget is not merely a statement of revenues and expenditures; it also serves as an expression of the new government's political vision.
In particular, the language used to describe transforming the economy from one controlled by a few groups into a more participatory system involving a broader segment of the population is consistent with public expectations. However, there is an important caveat. After the mass uprising, people expect not only a new political narrative but also visible changes in the distribution of power, resources, opportunities, and public services. The budget acknowledges those expectations, but it has not yet translated them sufficiently into a practical and implementable economic action plan.
The problem is that a clear gap remains between public expectations and the realities of economic management. The rhetoric of reform in the budget is strong, but in many areas the roadmap for reform remains unclear. Major changes have been proposed in the banking sector, revenue administration, public expenditure, project implementation, social protection, and employment. Yet the budget should have provided greater clarity on what reforms will be undertaken, when they will occur, who will lead them, how they will be implemented, and by what indicators their success will be measured.
After the mass uprising, people are no longer inclined to be highly patient. They do not want to hear promises alone; they want to see relief in the marketplace, greater employment opportunities, easier access to public services, restored confidence in the banking sector, and visible action against corruption. That is where this budget faces both its greatest weakness and its greatest test. It has given voice to public expectations, but it has not yet clearly demonstrated the reliable institutional mechanisms needed to fulfill them.
Does this budget contain any notable innovations compared with budgets presented by previous governments?
Selim Raihan: There are some new elements, particularly the “3R Strategy”—Recovery, Transition, and Reconstruction. Under this framework, the government speaks of economic recovery, transformation, and rebuilding. New initiatives include the Family Card program, the creative economy, a sports-based economy, deregulation, free-trade zones, logistics investment, and incentives for technology and green sectors. Compared with the routine budgets of previous years, these ideas introduce a different political and economic tone.
That said, Bangladeshi budgets have often featured ambitious goals, expectations of high growth, investment in human capital, reliance on the private sector, and promises of increasing revenue. This budget continues that tradition. The difference lies in its language, sectoral priorities, and certain political emphases. However, genuine innovation will be proven through implementation. If tax incentives become another form of preferential treatment, if deregulation gets stuck in bureaucracy, and if social-sector allocations fail to produce tangible outcomes, much of the innovation will remain only on paper.
There are fresh ideas in some sectors, such as creative hubs, accelerated depreciation benefits for regional investments, and opportunities for foreign investment in logistics. But turning these ideas into economic outcomes will require a coordinated package of legislation, data systems, financing, skills development, and market linkages. That level of completeness is not yet evident in the budget.
A visible difference between this budget and those of the past is its greater diversity of sectoral focus. Beyond exports, power, infrastructure, and agriculture, it brings culture, sports, digital content, freelancing, and locally produced creative goods into economic policy discussions. This is a positive development, but the connections between these sectors and mainstream industrial and trade policies remain unclear.
This is a budget driven by a broad political vision. How significant do you see the implementation risks?
Selim Raihan: The political vision behind this budget is expansive. The government is simultaneously pursuing stability, investment, employment, social protection, human resource development, energy security, regional development, and financial-sector reform. Each of these goals is important on its own. The challenge is that achieving them all at once requires a much stronger state capacity in administration, revenue collection, project management, and policy continuity. This has long been one of Bangladesh’s key weaknesses.
As a result, the implementation risks are substantial. If revenue collection falls short, development spending may have to be cut. If the banking sector remains weak, credit flows to investment will be constrained. If high inflation persists, it will be difficult to protect people’s real incomes even with expanded social protection programs. Likewise, delays in project implementation, weaknesses in procurement processes, and administrative bottlenecks at the local level could reduce the effectiveness of budget allocations. For this budget to succeed, strict oversight of implementation mechanisms is just as important as allocating funds.
Prothom Alo :
This is not only a very large budget but also one with a very large deficit. The question is: where will the money come from? Can the National Board of Revenue (NBR) achieve its revenue target? It appears that tax coverage has been expanded while offering tax relief to almost all groups. How effective is this likely to be? If the deficit is financed through borrowing, the consequences could be significant.
Selim Raihan: The weakest aspect of the budget is its revenue target. The government projects total revenue of Tk 695,000 crore for fiscal year 2026–27, including Tk 604,000 crore from the NBR. Given current economic realities, this target is extremely ambitious—arguably unrealistic. The economy is still dealing with high inflation, weak investment, import pressures, uncertainty in the banking sector, and strained consumer demand. Under such conditions, a major jump in revenue collection is not usually easy to achieve.
The NBR’s problem is not that its targets are too low; the problem is structural. The tax base is narrow, tax exemptions are numerous, complaints of harassment persist within tax administration, voluntary compliance remains weak, and the capacity to detect large-scale tax evasion is limited. The budget proposes digitalization, risk-based audits, tax-base expansion, and a review of tax exemptions. These measures are necessary, but it is difficult to expect major results from them within a single year.
If revenue targets prove unrealistic, the government may be forced to cut expenditures midyear, increase bank borrowing, accumulate unpaid bills, or rely more heavily on indirect taxes.
Although the government has announced tax relief for many groups, expanding the tax net could place greater pressure on small businesses, wholesalers, SMEs, and middle-class professionals. Tax fairness cannot be achieved unless there is stricter scrutiny of large asset holders, high-income groups, undeclared wealth, tax evasion, and the transparency of tax expenditures.
Financing the deficit through borrowing also carries significant consequences. It can increase interest costs, crowd out private-sector borrowing, and reduce fiscal space for social and development spending in future budgets. Interest payments already account for a substantial portion of expenditure. If borrowed funds are not directed toward productive investments, the burden will ultimately fall on future taxpayers. Therefore, the key issue is not simply the size of the deficit, but how it is financed and whether the borrowed resources are being used productively.
There are also questions about the NBR’s institutional capacity. Tax administration must become more taxpayer-friendly while maintaining revenue collection, but that transformation will not be easy. Businesses are unlikely to gain confidence if uncertainty persists in field-level administration, audit transparency, dispute resolution, VAT refunds, and customs valuation. Increased pressure to meet targets may also heighten the risk of taxpayer harassment.
The government has set targets of reducing inflation to 7.5 per cent and raising GDP growth to 6.5 per cent. Given the Iran war and the economic realities of the past four to five years, how realistic are these goals? Does the budget reflect effective measures to reduce inflation?
Selim Raihan: The targets of reducing inflation to 7.5 per cent and increasing GDP growth to 6.5 per cent are politically attractive but economically challenging. The high inflation of recent years has eroded people’s purchasing power, with food inflation being particularly concerning. On top of that, tensions in the Middle East, energy prices, fertilizer costs, transportation expenses, import costs, and exchange-rate pressures could all add further inflationary pressure. The budget itself acknowledges that external shocks affecting energy and food supply chains could increase inflation.
The budget does contain some measures aimed at reducing inflation, such as food-support programs, Open Market Sales (OMS), support for agricultural production, fertiliser subsidies, and social protection initiatives. However, it should have provided a clearer strategy regarding market management, competition policy, control of hoarding, supply-chain efficiency, import management, and coordination between monetary and fiscal policy.
The situation is complicated by the fact that government spending is expected to rise, bank borrowing will continue, and tax concessions are also being expanded. Under these circumstances, assuming that inflation will decline rapidly is risky. The growth target likewise depends heavily on a recovery in investment. Without a significant increase in investment, achieving 6.5 percent GDP growth may prove difficult.
The government has increased allocations for social protection programs, including the Family Card initiative. What are the challenges in ensuring that the benefits actually reach the targeted groups?
Selim Raihan: Increasing allocations for social safety nets is timely. Given high inflation, rising food costs, the erosion of real incomes among low-income households, and uncertainty in the informal labour market, cash transfers and food assistance are necessary. If designed properly, initiatives like the Family Card could bring various fragmented programs under a unified family-based support framework. This could provide a degree of protection to poor households, women, children, the elderly, and other vulnerable groups.
However, in Bangladesh, one of the major problems in social safety nets is not only limited funding but also weak targeting. Often, genuinely poor households are excluded, while relatively well-off individuals receive benefits. Political influence, bias in beneficiary selection, inadequate data, and irregularities at the local level are significant challenges. Digital databases can help, but if the quality of the data is poor, technology will merely accelerate existing errors. For the Family Card program to succeed, it will require regularly updated poverty data, an effective grievance redress system, local verification processes, prioritization of female-headed households, and transparent monitoring.
Issuing cards in the name of women heads of households is a positive step. However, providing cash alone is not enough. Unless the card is linked to food, healthcare, education, skills development, employment opportunities, and local services, it will remain merely a welfare-transfer program. To generate meaningful benefits, social protection must become a pathway to social mobility rather than simply a mechanism for managing poverty.
Another important issue is the urban poor. Discussions on social safety nets often focus on rural poverty, but low-income urban families are also under severe pressure from housing rents, food costs, transportation expenses, and medical bills. Unless there is a clear mechanism for including them in the Family Card program, a large segment of vulnerable people may be left out.
While benefit levels in social safety net programs should be increased, it is important to assess whether they are sufficient relative to inflation. Therefore, evaluation should focus not only on the number of beneficiaries but also on their actual purchasing power and their progress toward escaping poverty.
More important than building hospitals are strengthening primary healthcare services, ensuring the presence of doctors and nurses, maintaining medicine supplies, improving referral systems, preventing disease, and reducing out-of-pocket healthcare costs for families
The budget increases allocations for education and healthcare. Does it provide a clear roadmap for improving educational quality and ensuring quality healthcare services?
Selim Raihan: The commitment to increasing allocations for education and healthcare is commendable, as Bangladesh has historically underinvested in both sectors. The budget emphasizes human capital development, skills, technology-based education, vocational training, healthcare services, and access to quality services for all. The direction is appropriate. However, the expenditure framework is still not sufficiently results-oriented.
In education, the biggest issues are teacher training, learning deficits, the quality of vocational education, language and digital skills, and university research. Educational quality cannot be restored simply through infrastructure projects or the introduction of new programs.
The same applies to healthcare. More important than building hospitals are strengthening primary healthcare services, ensuring the presence of doctors and nurses, maintaining medicine supplies, improving referral systems, preventing disease, and reducing out-of-pocket healthcare costs for families. The budget provides broad direction, but clearer plans are needed regarding spending, staffing, accountability, and performance indicators to ensure quality service delivery.
Regional disparities are also a major concern in both education and healthcare. Even if allocations increase, inclusive development will remain elusive if qualified teachers, specialist physicians, laboratories, internet access, medicines, and management capacity continue to be concentrated in urban areas. The budget should provide a clearer strategy for reducing these regional inequalities.
Moreover, both sectors need independent mechanisms to measure spending efficiency. Without indicators such as how many children achieve minimum learning standards, how many patients receive care within their own districts, or how many families avoid falling into poverty because of medical expenses, it will be difficult to assess success.
Policy stability is especially critical for attracting investment. If incentives are offered one year and withdrawn the next, investors will be reluctant to take risks
Has the budget provided a clear roadmap for addressing the enormous challenge of increasing investment and employment?
Selim Raihan: Describing the private sector as the engine of growth is realistic. Measures such as deregulation, tax stability, lower taxes on foreign financing, free-trade zones, investment in logistics, renewable energy, electric vehicles, batteries, semiconductors, startups, and SME incentives could send positive signals to investors. However, investment does not come from incentives alone.
Investors also look at policy consistency, energy security, efficient customs procedures, access to land, skilled labor, bank financing, judicial protection, and the behavior of government agencies. The budget speaks about these issues, but provides limited detail on how the practical barriers will be removed.
For employment generation, SMEs and regional industrialization are particularly important. The technology sector and creative economy have significant potential, but their benefits may remain confined to a relatively small segment of the population. Large numbers of young people need jobs in labor-intensive manufacturing, agro-based industries, services, construction, and skills-linked occupations. The budget does not fully explain how this connection will be established.
Tax incentives for freelancers and startups send a positive signal to young people. However, there is also a vast population of less-skilled youth whose needs are different. They require local industries, vocational training, labor market information, and financing for small enterprises. Employment policy therefore needs to be broader in scope.
Policy stability is especially critical for attracting investment. If incentives are offered one year and withdrawn the next, investors will be reluctant to take risks. Likewise, tax incentives alone will have limited impact if approval processes remain cumbersome. The government should publish clear timelines for every investment-related service.
Government employees are receiving salary increases. Many people are asking what this means for private-sector employees and workers.
Selim Raihan: The salary structure for government employees has remained largely unchanged for nearly eleven years. Given inflationary pressures, there is certainly a strong justification for adjusting their salaries. If the state wants an efficient, honest, and professional civil service, compensation must be aligned with the realities of living costs.
At the same time, the government should articulate clearer protections for workers in the private sector. These could include enforcing minimum wages, improving labour market information systems, providing skills subsidies, expanding access to small-business credit, introducing social insurance schemes, and supporting the urban poor. Salary increases for public employees should be part of a broader income-protection strategy.
Another important question is how the additional wage bill will be financed. If it is funded through increased revenue collection, the pressure on the economy will be relatively limited. However, if revenue targets are not met, the government will either have to borrow or cut spending elsewhere.
In particular, if a significant portion of the additional expenditure is financed through borrowing, the resulting increase in demand could add to inflationary pressures. Therefore, public-sector salary adjustments should be linked not only to revenue capacity but also to productivity, service quality, and broader labor market policies.
Prothom Alo :
Would you like to make any overall comments on this year’s budget?
Selim Raihan: Overall, the budget creates some positive opportunities, but it also contains significant risks and weaknesses in implementation. There are substantial questions about how much of the promised outcomes will actually materialize. Its success will depend on less rhetoric and more implementation, fewer concessions and greater accountability, and less formality and more tangible results.
Otherwise, this budget risks remaining confined to paper—much like many ambitious plans of the past. This is now the government’s most difficult and most urgent economic test.
Prothom Alo :
Thank you.
Selim Raihan: Thank you as well.