Proposed budget prioritises people, not just growth metrics: Finance adviser

The interim government has shifted its budgetary focus from ambitious growth targets to improving people's welfare, said Finance Adviser Salehuddin Ahmed during a post-budget press briefing on Tuesday (3 June).

"We have stepped back from chasing abstract growth metrics," he said at the event in Osmani Memorial Auditorium in Dhaka. "Who has really achieved such high growth figures in the past? Our focus is on improving people's lives, not just numbers."

He described the proposed budget for FY26 as "people-friendly and business-friendly", noting that no budget can fully satisfy all stakeholders.

"The road ahead is difficult and full of challenges. But I believe the proposed budget is balanced and pragmatic," he said.

The adviser acknowledged that the budget could have been stronger if more revenue had been raised domestically, if corruption was tackled, and if laundered money could be brought back.

However, he said repatriating illicit funds is not easy. "The government is working on 12 cases to retrieve laundered money. If that money returned, we wouldn't need to approach the IMF," he said.

Regarding the provision for legalising black money through flat purchases, he said it would be reviewed before the final ordinance is gazetted on 22 June.

Finance Adviser Salehuddin Ahmed on Monday unveiled the proposed budget for FY26, totalling Tk7,90,000 crore – a 0.87% decline from the current fiscal's budget.

Stabilising troubled economy

Salehuddin reflected on the government's approach for the budget, saying, "We took charge when the economy was on the edge of a cliff, almost in the ICU. Our first task was to stabilise the country and ensure law and order."

He said the current economic environment shows "a measure of stability," allowing the government to present a "pragmatic and implementable" budget.

Addressing the reliance on foreign loans, Salehuddin explained, "Our resources are limited, but our needs are enormous. We had to consider global circumstances as well as domestic instability in banking, the capital market, and politics. Many institutions were either broken or weakened."

He added, "High inflation, energy crises, and a fragile banking sector were all challenges. For the first time, we have reduced the budget size compared to the previous year to reflect these realities."

Inflation, purchasing power

Regarding inflation, Salehuddin said that prices for many essential goods have stabilised or even fallen, though "it's unrealistic to expect all prices to fall at once." 

The budget aims to enhance people's purchasing power, he said.

The government aims to increase revenue collection, but the adviser noted the need for balance. "Every business wants tax relief, but if we reduce taxes in one area, we must increase them elsewhere," he said. 

The National Board of Revenue is being restructured to address these challenges, he added.

He dismissed the idea of a "revolutionary' budget", saying, "There are established methodologies we must follow. We can't just throw everything out overnight."

Salehuddin Ahmed said the budget prioritises improving people's quality of life while also supporting trade and commerce. It also includes measures to make debt management sustainable to avoid over-reliance on external borrowing. 

"While there's some repetition in the budget structure, we've also included some innovations," he said.

Asked if the middle class has been directly targeted, Salehuddin said, "No budget can target everyone specifically, and the middle class was not singled out this time."

The adviser pledged action against weak banks under the new Bank Resolution Ordinance, criticising the "unprecedented situation" where "owners have taken 70% of a bank's funds".

'Budget is frugal and feasible'

Also present, Planning Adviser Wahiduddin Mahmud called the proposed budget "realistic and frugal," describing it as "100% implementable." 

He said the government aims to break the "vicious cycle of borrowing to repay debts," though one budget alone cannot achieve this.

He revealed that most of the projects allocated funds in the new budget were initiated by the previous government without proper financial consideration. 

"We've inherited a lot of debris. Since taking office, we've been cleaning up," he said.

He added, "Only 20-30 of the 1,300 projects are new, and even those were included in last year's budget documents. Our real focus is to trim and clean up unnecessary projects."

Wahiduddin said, "The projects initiated by this government will start from FY27. A future political government will then decide whether to focus on infrastructure or human development."

He mentioned that the Public Procurement Act will be amended to introduce e-tendering and full competition across all sectors. "Previously, only two or three companies dominated large infrastructure tenders," he said.

Adviser Wahiduddin acknowledged rising poverty levels and said the Bangladesh Bureau of Statistics has been tasked with conducting a quick survey to determine the real causes. 

"We haven't yet done anything special to create new jobs," he admitted.

Inflation outlook

Bangladesh Bank Governor Ahsan H Mansur said inflation should fall to below 6.5% by the end of the next fiscal year. "Our biggest challenge has been to stabilise the exchange rate, which we've managed for the past seven to eight months," he said.

He added that the prices of oil and gas are unlikely to rise, and the global prices of oil and food are falling. As a result, he expects inflation to drop to around 7% by August-September and continue falling thereafter.

Energy, agri, social safety, trade

Energy Adviser Muhammad Fauzul Kabir Khan said the withdrawal of a 15% VAT on imported LNG was necessary because the government sells it at a loss. He noted that steps have been taken to reduce highway extortion, helping to control inflation.

Agriculture Adviser Lt Gen (retd) Md Jahangir Alam Chowdhury said the government's incentives benefit all groups, including the middle class. He announced plans to build 100 small cold storage facilities nationwide and four separate potato seed storages.

Commerce Adviser Sk Bashir Uddin said the economy was at the brink when the previous government was toppled. "Even Hasina warned of famine in March-April based on information available to her. We've stabilised the economy since then."

Finance Secretary Khairuzzaman Majumder said that the target for bank borrowing has been reduced in the new budget to avoid crowding out private sector credit. 

He outlined plans for a Tk100 crore start-up fund, a Tk100 crore employment fund, and a Tk125 crore fund for women entrepreneurs.

He added that the budget also expands the social safety net by both increasing allowances and coverage. Efforts to stabilise prices include extending the OMS food sales programme from five to six months and using Trading Corporation of Bangladesh channels.

NBR Chairman Abdur Rahman Khan said, while some tariffs have been raised to protect local industries, there are no increases on essential goods. He also noted that the final decision on legalising undeclared money in the housing sector rests with the advisers.