The interim government on Monday announced the new national budget at Tk 7.9 lakh crore, projecting ambitious revenue-earning measures to keep the deficit at tolerable 3.6 per cent.
Finance adviser Salehuddin Ahmed, while unveiling the new measures for the financial year 2025-26 in a televised presentation in the absence of Jatiya Sangsad, projected an overall income of Tk 5.64 lakh crore, of which some 88.4 per cent is expected to come via the National Board of Revenue through direct tax, duty and value added tax.
Limiting the undisclosed money investment facility in land and flats with a provision for declaring the source of fund and a steep hike in the tax for investments, the finance adviser also announced cancelling exemption of corporate tax and value added tax for industries.
Announcements have also been made to relax duty on imported products such as refined sugar, petroleum products, buses, minibuses, guns, mortars, rocket聽 launchers, grenade launchers while there would be hike in duty on cosmetics, toys, cell phones, and different types of door locks in an effort to address the tariff rationalisation issue ahead of the country鈥檚 graduation from the least developed countries鈥� block in November 2026.
Economists said that the new tariff measures might force many domestic industries to face a tougher competition and draw criticisms from businesses.
Commenting that some aspects of the financing side of the budget are new, former World Bank Dhaka office chief economist Zahid Hussain observed that the overall revenue income target was highly ambitious.
He apprehended that shortfalls in revenue earnings would compel the interim government to downsize the overall budget or increase borrowings to meet the deficit.
According to him, the expenditure side of the budget is almost usual.
Out of the projected Tk 5.44 lakh crore non-development budget, the highest 22.4 per cent has to be set aside for payment of interest on internal and external borrowings and 19.1 per cent for subsidy and incentives.
The allocation to the public administration will account for 10.2 per cent of the budget, some one percentage point higher than the allocation made in the outgoing budget.
The finance adviser proposed to increase special benefit for the government employees in the new budget to meet the demand for dearness allowance.
Narrating the measures and actions taken over the past 10 months to improve the economic headwinds left behind by the ousted Awami League regime in the wake of a mass uprising, the finance adviser proposed increased rates of allowances under the social safety net programme along with higher allocations to the education and health sectors.
Proposing higher allocations for open market sales and the distribution of subsidised food for card holders against the backdrop of inflation, the finance adviser sanctioned Tk 405 crore for martyrs and injured persons during the July uprising in 2024.
Economists, however, said that the finance adviser had failed to live up to the expectation arising out of the true spirit of the uprising because of giving less focus on employment and investment by private sector businesses.
Demands for reducing inequality and increasing employment by students in the uprising found partial reflection in the budget, said executive director Selim Raihan of South Asian Network on Economic Modelling.
The responses are fragmented and limited, he said, adding that the budget lacked concrete policy guarantees or a road map for creating an investment-friendly environment.
Unlike like previous occasions, the finance adviser did not make any direct projection of GDP growth, inflation and private investment in his budget speech titled 鈥楤uilding an Equitable and Sustainable Economic System鈥�.
The target of 5.5 per cent growth in gross domestic product, inflation at 6.5 per cent, and private investment at 24.31 per cent in FY26 are, however, made available in the Medium-Term Outlook of Bangladesh Economy.
Admitting that it is not easy to deal with the instability at the regional and global levels, the finance adviser projected net loans of Tk 96,000 crore from external sources and a net Tk 1.25 lakh crore borrowing from domestic sources to meet the deficit accounting for 3.6 per cent of the projected GDP at Tk 62.44 lakh crore in FY26.聽
This is the smallest budget deficit in a decade, largely because of a small annual development programme , worth Tk 2.3 lakh crore, adopted to implement only economically viable projects with main focuses on improving the implementation rate and quality of the projects.
The total new budget outlay is Tk 7,000 crore less than the original size of Tk 7.97 lakh crore announced in June 2024 for the outgoing financial year 2024-25, but higher by Tk 46,000 crore from the revised of Tk 7.44 lakh.
