Back in the days of our childhood, I would sit on a haystack on wintry nights of Nalitabari, listening to folk music groups rendering their 'jatra gaan' or 'pala gaan'. I would wait in anticipation for the actual narrative to begin, but the introduction leading up to the actual meaty part of the performance would go on for half an hour. I would irately and impatiently wait, and I would feel exactly the same way every time the finance ministers in Bangladesh would present the budget. The first half an hour would be spent on lavishing praise on the government. In the 'jatra gaan', it would be like that, singing praise to the extreme. In the budget presentation, it would begin and end with praise, and would be interspersed with praise throughout.
One could only pity members of the ruling party on that day -- obliged to thump the table innumerable times. Even if the budget would do good for the economy, the sheer volume and excesses in presentation would mar the national reputation before the rest of the world.
The 1/11 caretaker government has set an excellent precedent by presenting the FY2008-09 budget in just 52 pages. Awami League’s budget speech for FY2009–2010 suddenly jumped to 114 pages. Since then, the length of the speech has continued to grow, reaching a record 202 pages in FY 2024–25, during the unrestrained tenure of a finance minister, who played a leading role in wrecking the capital market and the banking sector.
This verbosity is worthy of a place in the Guinness World Records. Just because the economy grows doesn’t mean the speech has to grow proportionately. India’s economy is at least eight times larger than Bangladesh’s, yet economist Nirmala Sitharaman concluded her budget speech in just 28 pages. Pakistan’s last budget speech was only 38 pages long.
The best aspect of this year’s budget in Bangladesh was its verbal restraint. Economic advisor Salehuddin Ahmed has shown that a national budget can be presented in just 56 pages. It could have been even shorter if the advisor had left out the reform rhetoric, which, ten months later, now reads more like a fairy tale. A budget is an economic document, there’s no need to bring in a dozen unrelated matters. Economist Salehuddin Ahmed served as the governor of Bangladesh Bank from 2005 to 2009.
After assuming power in 2009, Awami League never appointed an economist as finance minister. The party perhaps feared a professional in that position might resist providing undue advantages to the wealthy elite. In contrast, the interim government is filled with economists: the governor, the planning advisor, and the finance advisor are all trained professionals. The chief advisor himself is a globally renowned figure in microfinance. As a result, public expectations surrounding the budget were quite high. By that standard, it seems the finance advisor did not, or could not, do his homework very well.
If we take the total budget of Tk 7.9 trillion (Tk 7 lakh 90 thousand crore) for the 2025–26 fiscal year as Tk 100, then Tk 71 comes from revenue income, while the remaining Tk 29 represents the deficit. To cover this deficit, Tk 13 will come from foreign loans and grants, and Tk 16 from domestic borrowing. There is nothing surprising or novel in this structure.
The current government has had full opportunity to implement the budget prepared by the Awami League in 2024. The revised budget size for the 2025 fiscal year was Tk 7.44 trillion (Tk 7 lakh 44 thousand crore). If we again consider this as Tk 100, revenue income amounted to Tk 70, and the remaining Tk 30 deficit would be met with Tk 14 from foreign loans and Tk 16 from domestic loans.
The advisor would have done better to avoid such controversial topics in his budget speech and instead make it a rigorous, knowledge-based economic document. That would have introduced a degree of novelty. That, too, could have been a reform in itself
Given the current dismal state of the stock market and business climate, there is little room for optimism regarding revenue collection. The deficit in the revised budget for 2025–26 may rise to Tk 30 or more. Structurally, then, this budget is not significantly different from the Awami League's final budget. However, compared to the FY2024–25, there is a shift in structure. In that budget, for every Tk 100, Tk 67 came from revenue, while the remaining Tk 33 was covered with Tk 13 in foreign loans and grants, and Tk 20 in domestic borrowing.
Planning advisor Wahiduddin Mahmud has said that this budget reflects an effort to move away from a debt-dependent development model.
Although Tk 530 billion (Tk 53 thousand crore) was slashed from the Awami League’s final budget, the larger chunk, that is, Tk 500 billion (Tk 50 thousand crore), was cut from the development budget. There is nothing wrong with that. It is expected that major development projects will be taken up by the newly elected government.
What was unwarranted, however, is the massive operating expenditure of this government, which has kept the Awami-era figures virtually intact and thus exposing inefficiency. On the surface, the government claims to be practicing austerity by keeping the cabinet small, and the speech reflects that claim. But the operating expenditure of Tk 5.06 trillion (Tk 5 lakh 6 thousand crore) in the concluding fiscal year does not support this claim since in the previous year, this figure was Tk 4.12 trillion (Tk 412 thousand crore).
The finance adviser made some biased remarks in the budget. At times, it seemed as if all dreams of Bangladesh’s development were born with the July 2024 uprising. But development is like the story of Rome being built brick by brick. It doesn’t happen overnight. Since the 1980s, Bangladesh’s growth rate has increased by 1 to 1.25 percentage points each decade. From 3.5 per cent in the 1980s, it rose to 6.5 per cent in the 2010s. During this period, Bangladesh was ruled by the Jatiya Party, BNP, and Awami League, all of whom share credit for this achievement.
At one point, the finance advisor said that his budget has moved away from the 'growth-centric' approach of the past and embraced a path of 'holistic development.' Yet, one of the growing aspects of past budgets was social protection, which hardly proves a narrow focus on growth alone. Besides, even if a budget were growth-oriented, what's wrong with that? Growth is not a sufficient condition for development, but it is a necessary one. There is no country, on any plant, that has achieved development without growth. Without the steady climb in growth since the 1980s, today’s Bangladesh would not exist.
This achievement is no small feat. During the same period, the once proud Pakistan saw its growth rate decline, from nearly 7 per cent to just 4 per cent. In this region, only India has managed a slightly higher growth trajectory than Bangladesh. That is why Amartya Sen remarked that Bangladesh has even surpassed India on many social indicators. These accomplishments didn’t begin in July. Claiming so sounds like a pet phrase of the BIDA chairman, who also argues that Bangladesh’s dream of becoming the next Singapore began only last July. Are all of this government's advisors required to push a specific narrative? Is this the so-called 'new arrangement'?
An economist's role is to present the history of the financial sector with objectivity and detachment. Why, then, did the finance advisor go back only 15 years in his budget speech when attempting to trace the roots of corruption? There is, of course, no disagreement among economists about the extent of corruption during the Awami League era. But if memory serves, Bangladesh achieved a 'hat trick' in global infamy around 2005, being ranked the most corrupt country for three consecutive years. At that time, the current finance advisor was the governor of the central bank. That is not to say he is being held solely responsible. Corruption in Bangladesh is an endemic problem, ingrained in the national character. Recent events only reaffirm this.
The advisor would have done better to avoid such controversial topics in his budget speech and instead make it a rigorous, knowledge-based economic document. That would have introduced a degree of novelty. That, too, could have been a reform in itself.
* Dr. Birupaksha Paul is Professor of Economics, State University of New York at Cortland
* The views expressed are the author’s own