Budget FY27: A shift towards pro-people economy

The true success of an economy cannot be measured solely by GDP growth, per capita income, or macroeconomic statistics.

For ordinary citizens, economic progress is reflected in their ability to afford food, healthcare, education, and other essential needs. Against this backdrop, Bangladesh’s proposed Budget for FY 2026-27 represents a notable shift toward addressing the concerns of low- and middle-income households that have endured years of inflationary pressure and rising living costs.

The latest budget appears to recognize the struggles of ordinary citizens and attempts to provide meaningful relief through a combination of tax reductions, social protection measures, and healthcare support.

One of the most significant features of the budget is its emphasis on lowering the cost of essential goods. Taxes and duties on a wide range of products – including rice, wheat, potatoes, fish, livestock, poultry, onions, garlic, sugar, salt, and edible oil – have been reduced.

While these measures may seem technical from a fiscal perspective, they have profound implications for millions of consumers. Since food inflation disproportionately affects lower-income households, reducing the tax burden on essential commodities can help improve affordability and strengthen food security. Beyond economic considerations, such initiatives also contribute to social stability and equity.

The healthcare sector has received considerable attention as well. Medical expenses remain one of the leading causes of financial hardship for Bangladeshi families, particularly those facing serious illnesses. Recognizing this challenge, the government has proposed VAT and duty exemptions on heart stents, dialysis equipment, raw materials for cancer medicines, and ophthalmic lenses. These measures are expected to reduce treatment costs and make critical healthcare services more accessible.

By lowering the financial burden associated with life-saving medical procedures, the budget demonstrates a strong commitment to public welfare.

Equally important is the expansion of social safety net programmes. The proposed allocation of Tk. 144,338 crore for social protection reflects a broader understanding that economic growth alone cannot ensure social stability. Vulnerable and disadvantaged populations require direct support mechanisms to protect them from economic shocks and rising living costs.

A particularly noteworthy initiative is the expansion of the Family Card programme, under which 4.1 million women are expected to receive monthly financial assistance of Tk. 2,500. With an allocation of Tk. 14,500 crore and a plan for nationwide expansion by 2030, the programme goes beyond poverty alleviation by promoting women’s economic empowerment and strengthening household financial security. International experience suggests that direct support to women often generates positive outcomes in family welfare, education, and nutrition.

The budget also introduces several measures aimed at supporting elderly citizens and marginalized groups. Free railway travel for senior citizens, a 25 percent fare reduction on metro rail services, increased old-age allowances, expanded widow benefits, and higher disability allowances reflect a more inclusive and compassionate approach to public policy.

The decision to raise disability allowances to Tk. 1,000 per month and enhance educational support for students with disabilities further underscores the government’s commitment to inclusive human development.

Another commendable step is the increased support for patients suffering from chronic and life-threatening illnesses. The one-time financial assistance for individuals affected by diseases such as cancer, kidney failure, and liver cirrhosis has been doubled from Tk. 50,000 to Tk. 100,000. For many families struggling with overwhelming treatment costs, this enhanced support could provide crucial financial relief.

Additional initiatives, including monthly allowances for families of those martyred or injured during the July Mass Uprising, increased honorariums for decorated freedom fighters, and gratuity provisions under the universal pension framework for private-sector employees, further demonstrate the government’s intention to treat social protection as a long-term investment rather than a fiscal burden.
Another positive aspect of the budget is its revenue strategy.

Instead of increasing taxes on existing taxpayers, the government has prioritized expanding the tax base. Such an approach promotes a more balanced and sustainable fiscal framework while reducing pressure on consumers and businesses.

Admittedly, the Budget 2026-27 will not eliminate inflation, unemployment, or structural weaknesses overnight. Market syndicates, supply chain inefficiencies, and investment challenges remain significant concerns. Furthermore, the provision allowing the legalisation of undisclosed wealth remains controversial and arguably represents the budget’s most debatable element. Nevertheless, when evaluated as a whole, the budget clearly signals a shift toward prioritizing the welfare of ordinary citizens.

Success of Budget will depend on its implementation. Tax reductions must translate into lower market prices, healthcare incentives must reduce treatment expenses, and social safety benefits must reach intended recipients.