Proposed budget fails to holistically address economic challenges: CPD
As the FY26 budget is about to be approved by the interim government, Dr Fahmida said, CPD underscores the implementation of the budget in an efficient manner
Centre for Policy Dialogue (CPD) on Sunday said the proposed budget fails to address the ongoing economic challenges holistically, which can provide relief to people and businesses.
"Rather, some fiscal measures contradict with the theme of the budget for FY26 - 'Building an Equitable and Sustainable Economic System'," CPD Executive Director Dr Fahmida Khatun said while presenting the keynote presentation at the CPD Budget Dialogue 2025: An analysis of the National Budget for FY 2025-26 at a city hotel.
She said the Budget for FY26 is exceptional in terms of its size - which is smaller than the FY25 budget and it mentioned its focus on overall development instead of growth, and priority on people instead of physical infrastructure. "Unfortunately, these objectives are not backed by budgetary measures," she criticised.
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She said several positive initiatives were proposed in the budget for FY26, including tax reliefs, allocations and incentives for various sectors, and higher taxation for harmful activities.
As the FY26 budget is about to be approved by the interim government, Dr Fahmida said, CPD underscores the implementation of the budget in an efficient manner.
"In this regard, a mid-term review of the implementation status and necessary corrections should be done by the interim government to enhance transparency and accountability," she said.
The CPD Executive Director identified that in the budget Macroeconomic projections appear optimistic, proposed fiscal framework is unlikely to hold, public expenditure priorities remain poorly aligned with strategic needs, Annual Development Programme (ADP) largely follows previous patterns, inflation control measures are inadequate, domestic market-oriented and import-substituting industries will face fiscal disadvantages key social sectors continue to be underfunded, allocations for youth and employment generation mark a positive development, limited emphasis on climate change and gender equality and revenue mobilisation efforts reflect growing fiscal pressure.
In a positive move, she said, the interim government has increased the total allocation of both ministries that focus on youth and employment generation.
The Ministry of Youth and Sports is receiving Tk2,423 crore (53.2% higher than the FY25) and it will receive its highest-ever allocation in FY26, both in terms of amount and budget share (0.307%) while the Ministry of Labour and Employment will receive Tk438 crore (26.6 higher than FY25).
The Ministry of Youth and Sports will receive its highest ever allocation in the next fiscal budget, both in terms of amount and budget share (0.307%).
She said that project-wise allocation of the ADP for two employment-related ministries suggests a disproportionately high share of the budget allocated for physical infrastructure projects.
"Several projects focused directly on training and skill development received relatively lower funding and Some unapproved projects had the potential to create employment opportunities," he said.
For example, she mentioned a project titled 'Working Environment and Social Protection for Workers in RMG and Leather Industries' which remained unapproved.
Despite being mentioned in the budget speech, no fund has been allocated for a three-year training and self-employment project for affected families of the July uprising.
She criticised the allocation of Tk100 crore for a youth festival as it lacks clear objectives and a strong rationale risks misuse of resources.
CPD Distinguished Fellow Professor Mustafizur Rahman chaired the programme.
