Budget FY26: Tk5,400cr allocated for PPP projects

Finance Adviser Salehuddin Ahmed has proposed allocation of Tk5,400 crore to implement investment projects through public-private partnerships (PPPs).

During his speech while presenting the proposed budget for the fiscal year 2025-26 today (2 June), the finance adviser said, "It has been proposed to allocate Tk5,400 crore to the PPP fund in the next fiscal year to encourage investment in public-private partnerships in potential sectors."

He added, "To boost private investment in the country, it is crucial to create a conducive environment. Therefore, we are making our utmost effort to identify existing obstacles to investment and remove them as quickly as possible."

Chowdhury Ashik Mahmud Bin Harun, executive chairman of the Bangladesh Investment Development Authority (Bida), welcomed the allocation.

"So far, there has not been much success in the PPP project. However, this time, development is possible if we move forward in a targeted manner. This allocation will be effective in implementing the project," he told TBS after the budget announcement.

Ashik, also executive chairman of the Bangladesh Economic Zones Authority (Beza), said, "We are trying to bring all the institutions related to investment development – such as PPP Authority, Bida, Beza, Bepza, and the Investment Promotion Agency (IPA) – under one umbrella."

When the PPP Authority comes under the same umbrella, the scope of work of the PPP Authority will increase and the speed of work will increase, he said.

Ashik said, "This time, the finance ministry has given a target-based budget instead of a large-scale one, which is commendable. We are working closely with various government ministries. Particularly from the finance ministry, we have received significant support regarding investment, and continue to do so. These aspects are reflected in the budget as a continuation of that. They are very much aligned with Bida's work."

Expressing satisfaction that the implementation of a "National Single Window" to create a business-friendly environment was included in the budget, he said, "We are working closely with this. Additionally, an initiative to launch a service-oriented platform like the "Bangladesh Business Portal" has been undertaken, which was discussed at Bida's governing body meeting. The budget also mentions support for this."

Regarding the development of an investor pipeline, Ashik said, "We are taking action in two ways: firstly, by modelling an Investor Relationship Management System, and secondly, by trying to launch an incentive scheme for everyone to attract investment. Anyone who brings in investment will be offered these incentives. We are trying to offer an incentive scheme similar to the cash-back provided for exports. The budget includes a commitment to financial assistance in this sector."

He further added, "A proposal to reduce shareholders in some government-owned agencies has been put forth, something we have advocated for a long time. This will increase the profitability and efficiency of these agencies and reduce government losses."

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), emphasised the importance of properly implementing these funds, stating, "In the past, PPP projects haven't yielded significant results. The private sector often wishes to advance at a faster pace, but faces bureaucratic complexities within the public sector, leading to complications. These bureaucratic hurdles must be overcome to ensure productive implementation."

The funds allocated to the PPP sector, she said, must be spent correctly on genuine, effective, and realistic PPP projects. "This means the money should be used not merely for superficial or nominal projects on paper, but for those that will genuinely alleviate public hardship or have a visible impact on the economy."

Support to CMSMEs, job creation

Meanwhile, the finance adviser proposed a special fund of Tk125 crore for women entrepreneurs. Additionally, he announced various initiatives in the Cottage, Micro, Small, and Medium Enterprise (CMSME) sector, intending to create 15,000 new entrepreneurs over the next three years.

Salehuddin said plans have been adopted to implement various programmes, including establishing a central database of CMSME entrepreneurs, distributing Tk1,000 crore in loans to 10,000 entrepreneurs in the CMSME sector at the grassroots level, including women entrepreneurs, and connecting 3,000 women entrepreneurs with corporate buyer organisations through digital platforms.

"According to estimates for the 2023-24 fiscal year, the contribution of cottage, small, micro and medium enterprises to Bangladesh's GDP is approximately 11.89%. Various programmes are ongoing to develop the skills of relevant entrepreneurs and improve the business environment for the development of this promising sector," said the finance adviser.

Fahmida Khatun said even with budget allocations, small entrepreneurs often face various complexities that prevent them from accessing these funds. "To overcome hurdles like filling out forms and acquiring a Taxpayer Identification Number (TIN) or Business Identification Number (BIN), they need assistance. Many are also unaware of the funds allocated for them, highlighting the necessity for proper publicity of these initiatives."

Dhaka Chamber of Commerce and Industry (DCCI) President Taskeen Ahmed said, "Amidst political instability and ongoing trade and economic crises, the withdrawal of tax exemptions across various sectors, in line with IMF conditions, lacks a clear roadmap for the CMSME sector. This oversight is expected to have a negative impact."