Bulk of social assistance to be distributed through digital cash transfer under FY26 budget

The government has allocated 40.05% of total social assistance to be distributed through digital cash transfers in the proposed national budget for FY 2025-26, aiming to enhance transparency and efficiency in the sector.

Social assistance remains the largest functional category within the broader social security framework, according to the budget papers.

The government has made significant progress in modernising this segment through digital means, reflecting its commitment to poverty alleviation and human rights.

According to the proposed budget, direct Government-to-Person (G2P) payments now account for 40.05% of all social protection interventions, up from 35.70% in FY 2023-24 and 34.48 % in the ongoing FY 2024-25. Of the 30 cash-based programmes under social protection, 29 are currently covered by G2P systems.

In total, Tk47,597 crore has been allocated to 36 different programmes under social assistance, which constitutes 40.78% of the total social security budget of Tk1,16,731 crore for FY 2025-26.

The transition to digitised cash transfers—utilising Mobile Financial Services (MFS), Electronic Fund Transfers (EFT), and the National Payment Switch Bangladesh (NPSB) — has improved service delivery, minimised leakages, and reduced administrative costs.

These reforms align with the National Social Security Strategy (NSSS), which advocates for robust delivery systems and better targeting.

Digital initiatives such as the Dynamic Social Registry, part of the Social Protection Digital Transformation Project, are also supporting this transformation.

The expansion of one-off cash grants and stipends further reflects Bangladesh's efforts to build a responsive and adaptive social protection system. In FY 2025-26, one-off cash grants are set to increase to 19.24% from 17.96% in the current fiscal, while stipends will slightly decline to 10.64% from 11.92%.

These cash-based programmes provide recipients with greater flexibility and dignity, allowing them to meet urgent needs such as healthcare, education, and nutrition.

Although food assistance continues to play a critical role — rising to 11.01% of social assistance in FY 2025-26 from 6.40% in the current fiscal — the government's gradual shift to cash transfers aligns with global best practices and the NSSS direction to phase out costly in-kind support.

Meanwhile, the budget reflects a reduced emphasis on public workfare programmes, with allocations falling to 6.85% from 18.46%. This shift signals a focus on direct income support for vulnerable populations, including women, the elderly, and persons with disabilities.

Bangladesh's investments in digital infrastructure, fintech innovation, and partnerships with financial institutions are positioning the country as a regional leader in inclusive, technology-driven social protection.

The continued growth of digital cash-based assistance highlights the government's resolve to promote financial inclusion, empower women economically, and foster sustainable development.

On 2 June, Finance Adviser Salehuddin Ahmed placed a Tk7,90,000 crore national budget for the fiscal year 2025–26, which is 12.7% of the GDP, through a pre-recorded televised video.

This is the country's 54th budget and the first of Muhammad Yunus-led interim government.

Out of the total budget size, the operating cost and other expenditure have been estimated at Tk5,60,000 crore while the Annual Development Programme (ADP) has been estimated at Tk2,30,000 crore.