The Budget Must Be Production-Oriented, Employment-Generating, Self-Reliant and Welfare-Based

A budget is an estimate of a government’s revenue and expenditure for a specific period, often referred to as a financial or fiscal year. Every national budget reflects a country’s economic philosophy. It is not merely an account of income and expenditure; rather, it outlines which sectors the state prioritizes, the direction in which it intends to steer the economy in the coming days, and what measures it plans to take to improve the living standards of ordinary people.

The BNP government is preparing the budget for the 2026–27 fiscal year. In line with the implementation of its election manifesto, the proposed size of the upcoming budget has been set at Tk 930,000 crore. The budget for the current 2025–26 fiscal year was Tk 790,000 crore. In other words, the budget is increasing by approximately Tk 140,000 crore within a year.

According to sources in the Finance Division of the Ministry of Finance, preparations are underway to present the budget in the National Parliament on June 11. However, the biggest question facing the government now is how to finance it. The revenue target for the upcoming budget is set at Tk 695,000 crore. Against this, the projected deficit stands at Tk 235,000 crore. To bridge this gap, the government will have to rely on both domestic and foreign borrowing.

The Finance Division plays the principal role in formulating the budget. Officials of the division say that nearly Tk 150,000 crore may be spent solely on interest payments in the upcoming budget. Due to the rapid increase in domestic and foreign debt, this has now become one of the government’s biggest areas of concern. The pressure may increase further over the next few years as the value of the dollar rises and repayments begin on loans taken for major infrastructure projects.

Some changes in the tax structure are expected in the upcoming budget. The tax-free income threshold for low- and middle-income groups may be increased somewhat. At the same time, the government is considering imposing taxes on some new sectors, although no final decision has yet been made. In addition, advance income tax may be imposed on motorcycles and battery-powered rickshaws. This would create additional pressure on low- and middle-income earners. The list of VAT exemptions may also be reduced. Currently, many products and services enjoy VAT exemption facilities. The International Monetary Fund (IMF) has long been advising the government to reduce such exemptions.

The size of the Annual Development Programme (ADP) for the next fiscal year has also been set at Tk 300,000 crore, which is a record. It was approved at a meeting of the National Economic Council (NEC).

One of the major weaknesses of Bangladesh’s economy is its excessive dependence on imports. A large amount of foreign currency is spent every year on importing finished goods. Yet a significant portion of these products can be manufactured domestically. Policymakers now need to adopt an industrial policy that encourages the import of raw materials instead of finished goods and creates an environment for producing final products through value addition in local industries.

The government now wants to revive momentum in industry and investment. For this reason, the upcoming budget may include tax exemptions, duty benefits and relaxed rescheduling policies for certain sectors. As part of efforts to restart closed state-owned factories, work is underway on a new investment framework based on leasing and public-private partnerships. The government is also considering grace periods of up to three years and long-term leasing facilities.

The government aims to build a trillion-dollar economy by 2034 through a people-friendly budget, according to the Prime Minister’s Adviser on Finance and Planning, Dr. Rashed Al Mahmud Titumir. He said that the current government was elected by the people and is therefore committed to fulfilling its promises in accordance with its election manifesto. That objective is reflected in every step the government takes toward building a humane, democratic and welfare-oriented state.

Creating an investment-friendly environment is now the need of the hour. Administrative complexities for domestic and foreign investors must be reduced, while policy stability, simplification of the tax structure and long-term industrial support must be ensured. Investment comes only when investors have confidence, and it is the responsibility of the state to build that confidence.

Alongside industrialization, however, the agricultural sector must receive the highest priority. History has repeatedly shown that food security is a country’s greatest strength during global crises. To reduce production costs for farmers, subsidies should be increased, support provided for agricultural machinery and irrigation systems, low-interest loans made available, and the use of modern technology ensured. The time has come to consider agriculture not merely as a livelihood sector but also as a component of national security.

At the same time, special measures are needed to protect the purchasing power of low-income and lower-middle-income groups. As ordinary people struggle to meet daily expenses under the pressure of inflation, tax policies and social safety net programmes must become more people-friendly. The benefits of economic growth will only be meaningful when ordinary people can experience them in their daily lives.

The success of a budget does not depend solely on how many thousands of crores of taka are spent. The real questions are: how many new jobs are created, how much domestic production increases, how much import dependence declines, and to what extent pressure on foreign exchange reserves is reduced. In today’s global reality, the most effective budget for Bangladesh will be one that moves the country from a consumption-driven economy to a production-driven economy.

If the philosophy of production, employment and self-reliance is placed at the center of every state policy, Bangladesh’s economy will not only be able to overcome current challenges but will also be able to build a strong foundation for the future.

In response to the question of what kind of budget we want, I would say that the upcoming budget should help alleviate people’s suffering. It should be people-friendly, supportive of public healthcare development and business-friendly. The budget should also be labor-friendly. At the same time, for those living below the poverty line, food prices must be kept under control and within their purchasing capacity. Their standard of living must be improved.

The burden of VAT and taxes on us should be reduced. Bureaucratic complexities should also be minimized. Measures should be taken to encourage investment and raise public health awareness in these areas. Budget allocations for research should be increased. The healthcare sector is in a very poor condition. Adequate budgetary allocations must be ensured for government hospitals. Budget allocations should be increased across all sectors, from villages to cities.

Another source of Bangladesh’s foreign exchange earnings is manpower export. Every year, expatriates send a substantial amount of remittances to the country. However, this sector is currently experiencing a slowdown as well. To address this, the government needs to further expand the scope of its diplomatic activities.

We all want resources to be distributed in a planned manner. No important sector should be neglected. Rickshaw pullers, day laborers, garment workers and farmers constitute the majority of our working population. Their demands are very modest. They want food prices not to rise further and wages to increase somewhat. Rising food prices inevitably create hardship in people’s lives. Therefore, even through subsidies if necessary, efforts should be made to keep commodity prices at a tolerable level. The Trading Corporation of Bangladesh (TCB) should be made more active.

We all have many expectations. Everyone wants a budget that is production-oriented and welfare-based. Given all the shocks facing the economy, it remains to be seen how the Finance Minister will meet all of our expectations.

Author: Market Analyst and Financial Management Consultant. Managing Director, Gold Bell Corporation.