Health allocation doubles, crosses 1% of GDP for first time
Experts warn of delivery gaps
The government has proposed Tk69,409 crore for the health sector in the fiscal 2026-27, equivalent to 1.01% of GDP, marking the first time health spending has crossed the 1% threshold. While experts described the increase as a positive shift towards prioritising public healthcare, they cautioned that budget implementation remains a major challenge.
Health expenditure in the revised FY26 budget stood at Tk35,477 crore, or 0.58% of GDP, according to Finance Minister Amir Khasru Mahmud Chowdhury, who placed the proposal in Parliament today (11 June). The new allocation is nearly double the revised outlay.
Experts, however, said while the increased focus is encouraging, execution will be difficult.
"We have set a target to gradually increase public investment in the health sector to 5% of GDP. Building a healthy nation is a prerequisite for sustainable development and a prosperous Bangladesh," the finance minister said.
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To address staffing shortages, the government plans to recruit 5,000 MBBS doctors. In addition, 100,000 health workers will be recruited nationwide, with a target that 80% of them will be women.
Tax reliefs to reduce treatment costs
The budget proposes multiple tax and duty exemptions in healthcare services and public health products to reduce treatment costs. These measures are expected to lower expenses for kidney, heart and eye patients and persons with disabilities, while encouraging local production of medicines and medical equipment.
Removal of VAT on imported heart stents and intraocular lenses is expected to reduce prices by around Tk20,000 and Tk5,000, respectively.
Similarly, withdrawal of advance tax on blood tubing sets used in kidney dialysis may reduce dialysis costs by about Tk800.
Shift toward preventive healthcare
The government plans to shift the health system from a treatment-centric model to preventive care. Modern primary healthcare units will be set up at the union and municipal ward levels.
"Large allocations alone will not deliver results if development spending is inefficient and institutional coordination remains weak. Key challenges include reducing out-of-pocket costs by ensuring access to medicines, vaccines and equipment, and integrating the e-health card into the social protection system."
An "e-health card" system is also planned under universal healthcare coverage. District hospitals and upazila health complexes will be upgraded into integrated secondary healthcare units providing dialysis, coronary care and other specialised services.
A "National Ambulance Pool" will also be introduced to improve patient transport.
Experts warn of implementation challenges
While welcoming increased allocations and new initiatives, experts said implementation remains the biggest challenge.
Rumana Huque, professor of economics at the University of Dhaka, told The Business Standard that although the health budget is positive, execution risks remain significant and allocations should not be reduced in revised budgets.
She also welcomed digital health initiatives such as the e-health card but warned that without clear planning, beneficiary targeting, financing and coordination with other social protection programmes, results would be limited.
"Vaccination programmes, TB control and family planning have weakened in recent years and need renewed focus and adequate funding," she said, adding that weak implementation of development spending and poor institutional coordination could undermine higher allocations.
She further said reducing out-of-pocket expenses would depend on ensuring the availability of medicines, vaccines and medical equipment, and integrating the e-health card into the social protection system. She stressed transparency and efficiency in recruiting 100,000 health workers.
More focus on prevention and nutrition
Professor Shafiun Nahin Shimul, director of the Institute of Health Economics at the University of Dhaka, said allocations for prevention and nutrition were positive, but efficiency gains would remain limited without major management reforms.
He said governance and efficiency in health deserved greater focus, adding that higher allocations alone would not benefit the public without stronger management capacity.
"Otherwise, increased spending will not benefit ordinary people; it may only benefit a few," he said.
Support for local pharmaceutical industry
The budget proposes duty exemptions on 17 raw materials to boost the export capacity of the domestic pharmaceutical industry. It also proposes zero duty and VAT on nine raw materials used in cancer drug production.
Additionally, full duty exemptions are proposed on 51 more raw materials to expand Active Pharmaceutical Ingredient (API) production.
SM Saifur Rahman, president of the Bangladesh API and Intermediaries Manufacturers Association, told TBS that support for new product development could strengthen the local API industry through increased government backing for research and investment.
