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BANGLADESH continues to face significant challenges in ensuring quality education, universally recognised as the cornerstone of national development, for all. Despite commendable progress in the enrolment rate, the dropout rate remains high, especially among girls and in marginalised communities while learning outcomes lag behind regional peers. The key to unlocking education potential lies not in reliance on foreign aid but inÌýstrengthening domestic financing, which would be a sustainable, predictable and scalable solution.

TheÌý4S framework — size, share, sensitivity and scrutiny — provides a strategic road map for increased education financing. ByÌýexpanding budget allocations, ensuring equitable distribution, targeting marginalised groups and enforcing accountability, Bangladesh can achieve Sustainable Development Goal 4 and secure a bright future for its youth.

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Size: domestic resource mobilisation

THE education sector suffers from chronic under-funding. While the government allocates aroundÌý15–17 per cent of the national budget to education, this translates to justÌý2–3 per cent of the gross domestic product, far below theÌý4–6 per cent that UNESCO recommends. The government mustÌýincrease domestic revenue generationÌýthrough progressive taxation, improved tax compliance and innovative local financing mechanisms to narrow the gap.

The government must pursue comprehensive revenue mobilisation strategies to address the chronic under-funding of education. A critical first step involves increasing education spending relative to national wealth. The tax-to-GDP ratio remains alarmingly low at 9–10 per cent, significantly trailing neighbouring India and Nepal where ratios range between 15 per cent and 25 per cent. This gap could be bridged by formalising the informal sector, which operates outside the tax net, and reducing excessive corporate tax exemptions that deprive the state of vital revenue. Additionally, implementing earmarked taxes for education could create a sustainable funding stream. A modest surcharge on luxury goods, telecommunications services or digital transactions could establish a dedicated education fund modelled after Ghana’s successful VAT levy system, which allocates 2.5 per cent specifically for education.

The strengthening of tax collection system is another crucial avenue for revenue enhancement. Digital transformation of tax administration through platforms like e-TDS, or electronic tax deduction at source, could significantly reduce leak and improve efficiency in revenue collection. Furthermore, the government must intensify efforts to combat illicit financial flows, which drain an estimated $5–7 billion a year from the economy through tax evasion and money laundering schemes. Recovering even a fraction of the lost funds, 10 per cent for an example, could finance the construction of 50,000 classrooms, dramatically improving the education infrastructure.

At the local government level, innovative financing mechanisms could supplement national efforts. Major city corporations such as Dhaka and Chittagong possess untapped potential to generate education funds through municipal levies. Imposing property taxes or business improvement fees on urban commercial centres could provide substantial resources for school infrastructure development. Public-private partnership schemes offer another promising avenue, as demonstrated by BRAC’s successful collaboration with private-sector actors through corporate social responsibility initiatives. The partnership could be scaled up to support teacher training programmes, digital learning infrastructure and school meal programmes.

The success of Punjab’s education tax in Pakistan provides a compelling case study for Bangladesh to consider. By implementing a 2 per cent education levy on agricultural income, Punjab’s provincial government generated significant additional resources for schools. Bangladesh’s city corporations and local governments could adapt this model, potentially applying similar levies on commercial property or urban services. Such localised financing mechanisms would not only increase education funding but also strengthen community ownership of schools. The measures, combined with national tax reforms, could help Bangladesh to achieve the recommended education spending target of 4–6 per cent of the gross domestic product, putting the country on track to meet its educational development goals.

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Share: education prioritisation in budget

BANGLADESH faces a critical misalignment in budget priorities that undermines its education system. Despite constitutional guarantees for free education, the nation allocates 12 per cent of its budget to defence compared with only 7 per cet for primary education. This disproportionate spending perpetuates systemic inequalities, particularly affecting girls in rural areas who already face significant barriers to education. To correct this imbalance, education must be recognised and funded as a national priority, with budget allocations brought in line with global benchmarks that recognise education as the foundation of sustainable development.

Substantial reforms are needed to realign budgetary priorities. The government should work towards increasing education’s share in the budget to 20 per cent, in accordance with the Incheon declaration’s recommendations. Achieving this target would require the strategic reallocation of funds from less critical sectors through comprehensive budget restructuring. Additionally, adopting Kenya’s model of legally ring-fencing education funds through constitutional mandate would provide crucial protection against arbitrary budget cuts and ensure stable, predictable financing for the education sector year after year.

The economic argument for prioritising education spending, particularly girls’ education, is overwhelming and should guide policy decisions. Rigorous research demonstrates that each additional year of schooling for girls leads to a 10 per cent reduction in child mortality rate and increases their future earnings potential by 15–20 per cent. The dramatic returns on investment underscore the need for targeted funding toward girls’ stipend, improved sanitary facilities in schools and an aggressive recruitment of female teachers, which are interventions that have proved effective in keeping girls enrolled through secondary education.

Bangladesh’s own female stipend programme serves as the compelling evidence of what targeted education funding can achieve. This initiative, which provides financial support to secondary school girls, has already boosted female enrolment rates by an impressive 30 per cent since the 1990s. However, the programme’s scope remains limited by budgetary constraints. Scaling up such successful interventions to reach all eligible students nationwide requires significantly greater and more consistent financial commitment from the government. By reallocating funds from over-prioritised sectors to education and implementing legal safeguards for education budgets, Bangladesh can transform the education system into a powerful engine for gender equality and economic growth while fulfilling its constitutional promise of education for all.

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Sensitivity: equitable funding for the marginalised

DESPITE a commendable achievement of near-universal primary enrolment, significant disparities persist in educational access and retention, particularly among the most vulnerable segments of the population. Children in rural areas, urban slums and national minority regions continue to face disproportionately high dropout rates because of intersecting challenges of poverty, child labour and early marriage. These systemic barriers demand a more nuanced, need-sensitive approach to education budgeting that specifically targets resources to reach and retain marginalised learners.

A critical first step involves implementing targeted funding mechanisms for basic education that recognise regional disparities. Adopting per-child funding formulas would ensure greater resources flow to disadvantaged districts such as the haor regions and Chittagong Hill Tracts, where geographic isolation and poverty create unique educational challenges. While primary education is officially tuition-free, many families still struggle with hidden costs of schooling, including uniforms, books, and transport, which are expenses that often prove prohibitive for the poorest households. Establishing a universal school grant system could eliminate such financial barriers and create more equitable access to education across all socio-economic groups.

Gender-responsive budgeting represents another essential component of equitable education financing. The introduction of gender budget statements within the education ministry would provide the much-needed transparency and accountability for funds allocated to address girls’ specific needs, including menstrual hygiene management, school safety measures and targeted scholarship programmes. The severe shortage of female teachers, with women accounting for only 35 per cent of secondary school teachers, presents another critical barrier to girls’ education, especially in rural areas where cultural norms often prevent families from sending girl children to schools staffed primarily by male teachers. Creating strong incentives for female teacher recruitment and deployment to underserved regions must become a budget priority to address this imbalance and create more gender-inclusive learning environments.

The success of Nepal’s school sector reform plan offers a valuable model for Bangladesh to consider. By implementing a gender-sensitive funding formula that directs additional resources to girls and marginalised castes, Nepal achieved a 22 per cent reduction in dropout rates among these vulnerable segments of the population. Bangladesh could adapt similar targeted funding mechanisms to address equity gaps, potentially combining Nepal’s approach with homegrown solutions suich as the female stipend programme, to create a comprehensive system of the need-based educational support. Such reforms would not only improve access but also help ensure that all children, regardless of gender, geography or socioeconomic status, can fully participate in and benefit from the education system.

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Scrutiny: transparency and accountability

THE effectiveness of education financing is severely undermined by systemic leaks, with an alarming 20–30 per cent of allocated funds lost to corruption, mismanagement or bureaucratic inefficiency. This haemorrhaging of resources represents both a moral and practical crisis as even substantial budget increases cannot improve learning outcomes without proper safeguards against fund diversion. The lack of financial transparency creates an environment where accountability remains elusive and public trust in the education system continues to erode.

Implementing robust, open budget platforms would mark a significant step forward in addressing the challenges. Making thye education management information system publicly accessible would empower citizens to track school-level expenditures in real time, creating unprecedented visibility into how education funds are actually spent. Complementing this, the introduction of national education accounts would provide a comprehensive picture of education financing by capturing currently invisible household contributions, which astonishingly account for 40 per cent of the total education spending despite constitutional guarantees of free education. These measures would not only expose inefficiencies but also highlight the financial burden borne by families.

Citizen participation must be central to any effective accountability framework. The promising results of community education watch pilots, where community monitoring successfully reduced fund diversion in school grants, demonstrate the transformative potential of grass-root oversight. Meanwhile, investigative journalism has proved instrumental in exposing corruption scandals, particularly in textbook procurement, leading to concrete policy reforms. These examples illustrate how combining institutional transparency with active civic engagement can create powerful checks against mismanagement.

The success of Uganda’s Uwezo initiative offers valuable lessons for Bangladesh. By mobilising citizens to independently assess both learning outcomes and budget execution, Uwezo created bottom-up pressure that compelled policymakers to address systemic failures. The school management committees could be strengthened to play a similar role, transforming them from nominal bodies into genuine instruments of accountability. Such an approach would not only curb financial leaks but also ensure that education spending actually translates into improved teaching quality and student achievement, fulfilling the constitutional right to quality education for all Bangladeshi children.

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Call to action

BANGLADESH faces a pivotal moment in its journey where strategic decisions about education financing will determine the nation’s trajectory. The comprehensive 4S framework presents a clear pathway for transformative change, beginning with expanding the overall size of the education budget through progressive tax reforms and rigorous anti-corruption measures that plug revenue leaks. This financial expansion must be coupled with bold reallocation decisions to secure a greater share of national spending for education, especially by reviewing disproportionate allocations to certain subsidies that offer lower social returns.

The framework’s third pillar demands enhanced sensitivity in budget design to ensure equitable access, requiring gender-responsive allocations and targeted funding mechanisms that address the specific barriers faced by marginalised communities. Finally, rigorous scrutiny through transparent budgeting processes and empowered citizens’ oversight must become non-negotiable components to guarantee that increased investments actually reach classrooms and improve learning outcomes.

The stakes could not be higher; continued underinvestment in education risks creating lost generations, perpetuating the circle of poverty and severely constraining the nation’s economic potential at precisely the moment when demographic dividends should be paying off. The government must urgently reframe education financing not as a discretionary expenditure but as the most strategic investment in human capital and prosperity. Immediate, decisive action to implement the 4S framework will determine whether the government fulfils its promise for a thriving, equitable knowledge economy or falls short of its developmental aspirations. The time for half-measures has passed. The moment for bold, visionary education financing reform has arrived.

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Musharraf Tansen is a development analyst and former country representative of the Malala Fund.