Stimulus for closed factories well-intentioned, but meeting eligibility difficult 

The budget is positive in its language and demonstrates a strong effort to improve the ease of doing business. It reflects many of the challenges that businesspeople face every day — tax burdens, bureaucratic red tape, licensing complications, and regulatory delays. The finance minister appears to understand these difficulties from a businessperson's perspective.

The announcement that all licences will be processed within seven days is encouraging, but it is difficult to believe under the current bureaucratic system. A garment factory, for example, requires approvals from multiple agencies, and these approvals often depend on one another. This initiative will only succeed if applications can be processed in parallel through an effective online one-stop service system.

The biggest challenge is implementation. Regulatory agencies must change their mindset. Many officials are accustomed to delaying services and exercising authority through control. If deregulation efforts are not closely monitored by the government, these announcements may remain only on paper.

The budget provides important tax relief for young entrepreneurs, startups, content creators, and existing businesses. This could encourage entrepreneurship and indirectly create employment opportunities. However, I was surprised by the increased duty on bicycle spare parts, which seems inconsistent with the budget's otherwise business-friendly approach.

A business-friendly budget can eventually become investment-friendly, but investment will not improve overnight. For investment to recover, the banking sector must become more stable, access to finance must improve, interest rates must decline, and a reliable energy supply must be ensured. If 70–80% of the budget's commitments are implemented effectively, investment could begin to improve within six months.

The banking sector remains a major concern. Instability in large banks sends a negative signal to the business community. No entrepreneur will feel comfortable obtaining project finance from a weak or crisis-hit bank. Many otherwise healthy businesses have already suffered because troubled banks were unable to release their funds.

The stimulus package aimed at reopening closed factories is well-intentioned, but the eligibility conditions may be too difficult for most factories to meet. It is hard to find factories that have closed solely because of working capital shortages. There is also a risk of misuse, which means the package requires further review and refinement.

The budget's biggest weakness is implementation plans. The government has set an ambitious revenue target of nearly Tk7 lakh crore while also planning increased bank borrowing, expanded social safety net spending, and the introduction of a new pay scale. These measures could inject additional liquidity into the economy at a time when the government is also attempting to control inflation. Managing these conflicting pressures will be extremely challenging.

The job market will improve only if investment improves, and that depends largely on the successful implementation of the budget's commitments.

RMG exports are facing pressure because of weak global demand, high oil prices, ongoing geopolitical conflicts, tariff uncertainty, and intensifying competition from other countries. Competitor nations have moved ahead in product diversification, productivity, marketing, and operational efficiency. Bangladesh has not made sufficient progress in these areas.

The private sector must take greater responsibility for diversifying products and improving productivity. The government can support these efforts by lowering interest rates, ensuring an uninterrupted energy supply, improving port efficiency, simplifying business procedures, and pursuing free trade agreements (FTAs) or other preferential trade arrangements.

The private sector also remains politicised and divided. Business leaders should avoid blindly supporting political parties or seeking advantages through political loyalty and slogans. Instead, they should raise their voices independently and responsibly while taking meaningful initiatives themselves. Some positive signs are visible within the leadership of the garment sector, but these efforts need to become more visible, stronger, and faster.

Fazlul Hoque spoke with TBS Executive Editor Shakhawat Liton.