Upcoming budget: Some indications, some reflections

Highlights:

• The budget 2026–27 focuses on human well-being and improving quality of life as its main development philosophy.
• It aims to balance austerity with welfare amid domestic and global economic crises, especially by maintaining subsidies on food, fuel, and fertiliser.
• Economic targets like 6.5% GDP growth and high investment and revenue ratios are seen as overly ambitious given current conditions.
• Strong emphasis is placed on social protection, including life-cycle safety nets, family cards for 26 million people, and disability support.
• Priority sectors include education, health, agriculture, ICT, and employment, but women's economic empowerment is relatively neglected.

Selim Jahan. Sketch: TBS

Some indications have already emerged regarding the content and size of Bangladesh's upcoming budget. Various statements by the country's finance minister, along with directives from the prime minister concerning the budget, have also revealed parts of its possible contents.

These signals and directives have undoubtedly reassured many quarters, but at the same time, according to many observers, several questions and ambiguities still remain regarding different aspects of the upcoming budget. The government will need to clarify these issues further in the coming days. Yet more, there are also people who disagree with some of the probable budget proposals.

The first point that needs to be emphasised is that the discussions and conversations surrounding the budget clearly indicate that a development philosophy is there in the proposed budget for fiscal year 2026–27. That development philosophy is "enhancing human well-being and improving people's quality of life." 

This deserves appreciation for two reasons. First, every budget should ideally have a development vision. Without such a vision, a budget is nothing more than a balance sheet of income and expenditure. It is reassuring that this year's budget appears to have recognised that truth. Second, it is heartening that human well-being and human development have been identified as the development philosophy of Bangladesh's 2026–27 budget.

Human beings should be at the centre of development, development of people, development for people, and development by the people are the ultimate goals of development. In a country like Bangladesh, this truth is even more relevant. Recognising human well-being and human development as the guiding philosophy of the budget is a timely step.

Bangladesh's budget for the fiscal year 2026–27 is being formulated at a time of crisis. One dimension of the crisis is domestic, and the other is global. Together, these pressures have placed Bangladesh under significant economic strain.

Naturally, in such circumstances, discussions of an austere and cost-saving budget will naturally arise. But one has to remember that while the country faces economic pressures at the macro level, common people across the board are also struggling to cope with the crises affecting their daily lives. Therefore, along with the task of tackling the macro crises, ensuring people's welfare and security is equally important. The current blueprint of the probable budget promises to maintain a balance between these two concerns, ensuring people's welfare while maintaining fiscal restraint. This is both desirable and reassuring.

Indeed, this balance between economy and people is extremely important. While trying to tighten the budget during difficult times, care must be taken not to put pressure on people's lives. Budgets must not be balanced at the cost of unbalancing people's lives. In this context, the upcoming budget has put emphasis not only on austerity, but also on welfare-oriented policies.

It implies that this is not the time to reduce subsidies on food, fuel, or fertiliser, regardless of what the International Monetary Fund may suggest. Removing subsidies on food or fuel now would devastate the lives of common people, and withdrawing fertiliser subsidies would put food security at risk.

However, there is no denying the fact that the heavy burden of subsidies has become almost unbearable for the Bangladesh economy and that reforms are necessary. But given the current realities, this is not the appropriate time for subsidy reforms, and for the time being, coping with the present crisis is far more urgent.

To improve people's well-being and their quality of life, the budget identifies inflation control, employment generation, job creation, and economic growth as key measures. Each of these is important for people's well-being. However, the question remains whether the targets set in these areas are realistic and practical. For example, the economic growth target for the next fiscal year has been set at 6.5%, while Bangladesh's current growth rate is only slightly above 3%.

In the context of the present stagnation of the Bangladesh economy, sluggish investment, and a global slowdown, how realistic is the expectation that the country's growth will double within a year? Similarly, it does not seem realistic to expect that within a single fiscal year Bangladesh's investment rate will rise to 31% of national income and revenue income to 10% of national income. It appears that ambition has outweighed practical thinking in these targets.

The upcoming budget also seems likely to place special emphasis on comprehensive social protection. In a welfare-oriented state system, this is extremely important. One major dimension of the proposed social protection framework is the establishment of a life-cycle based social security system. Initially, the poor, the destitute, and the marginalised groups will be included in this safety net, and the programme is expected to be implemented over the next five years. 

However, for the success of this initiative, clear strategies, visible beneficiary targeting and selection, and precise financial estimates will be necessary. Beyond this life-cycle social protection framework, the budget is also expected to expand the social safety net through family cards, in line with the current government's election manifesto and commitment. About 4.8 million families will benefit, with direct beneficiaries numbering around 26 million people. This initiative will require approximately 145 billion Taka in the 2026–27 fiscal year.

At the same time, special protection measures for persons with disabilities have also been highlighted in the social protection part of the budget. As a result, the protection of the rights of persons with disabilities and the provision of necessary services for them have become part of the budget discussions.

Issues currently under consideration include specialised schools for people with disabilities and disability-friendly infrastructure in all institutions. These are not merely symbolic matters, they are essential components of building an inclusive society.

The budget's probable blueprint is also discussing allocations for education and health sectors with human well-being at the forefront. Efforts to make education more joyful are extremely important for the mental development of children and adolescents. And it is gratifying that the budget recognises that fact.

In this context, it would be beneficial if the budget includes policies to address the excessive time children spend on digital devices and the harmful effects associated with it. This is crucial for the mental health of young people. As a part of its human well-being approach, the budget stresses that children with special needs also require healthcare and rehabilitation services.

Safe healthcare for everyone must also be ensured. In this regard, various healthcare protection measures should be identified. Food security also plays a major role in human security, which requires support for the country's long-neglected agricultural sector.

The budget outline includes provisions to continue agricultural production through support to farmers via the recently introduced Farmers Cards programme. This initiative will cost Taka 14 billion and would benefit more than 22,000 farmers. The budget is also expected to include environmental protection measures and tree plantation programmes.

It has been reported that the budget is going to provide priority to information and communication technology (ICT), technical education, training, and employment opportunities for workers abroad. Improving skills, fostering entrepreneurship, creating employment at home and abroad, and moving Bangladesh's economy to a higher level will improve people's capabilities and livelihoods. Various indications suggest that these issues will receive importance in the upcoming budget as well.

One area where the budget still appears somewhat unclear is women's economic empowerment. Current budget discussions, directives, and proposals seem relatively silent regarding expanding women's employment, ensuring support services for working women, providing incentives for female entrepreneurs, offering loans and other facilities to women, and providing multidimensional training opportunities.

Likewise, there has been little discussion about women's safety, rights, and equality in the budget framework. This is unfortunate. A truly welfare-oriented budget cannot be created while overlooking women.

The upcoming budget reflects ambition in many areas, but it must also confront the realities of limited capacity. In the face of crisis, the budget's toughest challenge will be managing various obstacles while balancing reform efforts with immediate economic pressures.

Selim Jahan is an economist and former director, Human Development Report Office, UNDP