New budget to lay foundation for womb-to-old age support

Highlights:

• Government plans life-cycle social security system within five years
• Support would cover pregnancy, education, unemployment, and old age
• "One Person, One Account" registry aims ensuring transparent beneficiary selection
• Social security allocation may exceed Tk1.30 lakh crore next fiscal
• Government targets universal social security coverage for all citizens by 2032
• Family Cards and Farmer's Cards expanded under BNP welfare initiatives

The government is set to unveil plans in the upcoming budget to transform Bangladesh into a welfare state by introducing a life-cycle based social security system within the next five years, alongside expanding the BNP's pledged Family Card and Farmer's Card programmes.

Under the new approach, state support would begin during pregnancy and continue through education, skills development, unemployment benefits and financial security in old age, aiming to break the intergenerational cycle of poverty.

Finance Minister Amir Khosru Mahmud Chowdhury will place the 2026-27 national budget, first of the BNP government, before the Jatiya Sangsad on 11 June.

Finance officials said Khosru will announce a shift from the existing fragmented social safety net system towards a comprehensive social security framework covering every citizen.

They said the government plans to gradually bring all citizens under a lifetime social security structure. To ensure transparency in beneficiary selection, work on a Dynamic Social Registry system, branded as "One Person, One Account", would begin in the next fiscal year.

Infograph: TBS

The government aims to implement the life-cycle social security model through this system.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said Bangladesh had taken initiatives several years ago to explore life-cycle based social security systems.

"However, little progress was made afterwards," he told TBS. "The government needs a clear strategy, cost estimates, and demographic projections for the next 15 to 20 years."

He added that existing programmes operate on an ad hoc basis, with little coordination. Many remain unemployed after completing education, while retirees often have no pension.

"If the government can develop a comprehensive strategy, implementation will be possible. Otherwise, it will remain only rhetoric. Since some groundwork on a life-cycle based social security system has already been done, the government can start from there," he said.

Earlier attempts

Several developed countries, including the UK, Sweden, Denmark, Norway, Finland, Germany, France, Canada, Australia and Japan, follow similar social security models.

Bangladesh initiated work on a life-cycle based National Social Security Strategy in 2015 with support from a UK-based organisation, but the initiative later stalled.

Bangladesh already operates several social protection programmes, including maternity allowances during pregnancy, support for lactating mothers after childbirth, education stipends, three-month allowances for unemployed workers, and old-age allowances.

However, the programmes lack an integrated framework. According to planning ministry reports, many current beneficiaries are not eligible for such support.

Towfiqul Islam Khan, research director at the Centre for Policy Dialogue, said the government's planned life-cycle social security system would gradually move towards universal coverage.

"However, beneficiary selection must be transparent," he said. "Around 18% of current Family Card recipients were reportedly ineligible for the programme."

He said the National Social Security Strategy would need to be reviewed to transform Bangladesh into a welfare state; "BNP's election manifesto included such commitments."

However, he warned that the government's biggest challenge would be mobilising sufficient revenue to implement the initiatives.

Coverage for all citizens by 2032

Officials said the proposed Tk9.30 lakh crore 2026-27 budget would prioritise building a welfare state through sweeping reforms to the social safety net structure. 

They said the budget would increase allocations for education and healthcare instead of focusing primarily on infrastructure.

The allocation for social security programmes may increase from Tk1.16 lakh crore in the current fiscal year to more than Tk1.30 lakh crore in the next budget.

Initially, the programmes would target poor and marginalised groups, but the government aims to gradually establish a universal social security framework for all citizens by 2032.

BNP's pledge for welfare state

Prime Minister Tarique Rahman has pledged to bring all citizens under a social security framework. He reiterated the commitment at the recent Deputy Commissioner conference.

"Our main goal is to bring every person in the state and society under a state safety net. Under the government's plan, various forms of assistance will gradually reach people in every targeted and selected sector," Tarique said at the event.

As part of the BNP's flagship projects, the government plans to distribute Family Cards to 41 lakh women-led households and Farmer's Cards to 42.5 lakh farmers in the next fiscal year.

It also plans to create employment for 34 lakh people through canal excavation projects. Altogether, 1.21 crore new people would be brought under the social safety net system. Beneficiaries under 18 cash and food programmes would rise to 3.63 crore people.

The government also plans phased implementation of a revised pay structure for public employees, improvements in education and healthcare quality, support for the creative economy, greater emphasis on renewable energy and increased defence procurement.

Officials added that the government plans to increase both beneficiary numbers and allowance amounts for maternity benefits, lactating mother allowances, old-age allowances, and disability benefits in the upcoming budget.

The government also plans to ensure stipends for poor and marginalised students from the start of their education and prioritise skills development.

Support would also be available for unemployed people or those who suddenly lose jobs. Reforms to old-age allowance schemes are also expected to enhance benefits.

Phased implementation of new pay scale

Finance officials have already prepared a draft of the finance minister's budget speech, which proposes phased implementation of a new pay structure for government employees. The draft is scheduled to be submitted to the finance minister on Sunday.

One official told TBS that the government lacks the financial capacity to implement the proposed pay scale in full at once.

"For this reason, the draft budget speech mentions a phased rollout. The final decision, however, will depend on directives from the finance minister and the prime minister."

The proposal includes payment of half the increased basic salary under the new structure. The remaining half would be paid in the fiscal 2027-28, while all allowances under the revised pay structure would be introduced the following year.

Defence spending

Finance officials said the government is facing growing pressure to increase defence spending as global tensions intensify. They said additional allocations may be needed for purchases including air defence systems and modern fighter aircraft.

One official said, "One conflict after another is unfolding globally, while many countries are strengthening their military capabilities. Tensions are also spreading across East Asia, prompting countries in the region to bolster their defences. There is pressure on Bangladesh to increase defence purchases, which could lead to a higher allocation for the sector."