Safety nets likely to go cash-first as govt overhauls welfare system
Cash-based support may account for over 71% of the total social welfare package.
The government is considering a shift away from discretionary relief, emergency food distribution, and politically mediated welfare programmes, aiming to anchor its social protection system in a constitutional and rights-based framework.
According to finance ministry sources, the country's safety net architecture might be undergoing a significant transformation, with a planned move from in-kind assistance towards direct cash transfers and broader social assistance programmes.
Officials said the rationale for the shift is that cash transfers give beneficiaries greater control over spending decisions, reduce leakages, and improve financial inclusion. In the FY2026–27 budget, cash-based support may account for over 71% of total social assistance spending.
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Sources involved in the budget preparation said the upcoming budget is likely to outline an ambitious fiscal roadmap for social protection, including a commitment to raise core social security spending to 3% of GDP by FY2027-28, alongside increased allocations of 3% of GDP each for education and health.
Officials added that the new framework is expected to enhance transparency and accountability through a structural reclassification of programmes, ensuring that social protection spending is traceable and linked to measurable welfare outcomes.
The social protection budget is set to reach an unprecedented scale while being reoriented towards lifecycle-based vulnerabilities.
Official sources said total social security spending for FY2026-27 is expected to reach a record Tk 1,44,338 crore, marking a 14% increase from the previous fiscal year. The allocation would account for 15.39% of the national budget and 2.11% of GDP.
The proposed composition of spending also reflects a growing emphasis on non-contributory welfare programmes. Social assistance is projected to account for 46.12% of total social security expenditure, up from 36.66% in FY2024-25.
Within this category, regular cash transfers are expected to emerge as the dominant form of support, with their share rising from 34.48% to 54.86% over the past two years.
Social insurance, with an estimated allocation of Tk35,389 crore, and general subsidies, at Tk 34,972 crore, are expected to be the next two largest components of the social security budget.
To drive horizontal expansion, the government is planning to allocate Tk17,000 crore in new pro-poor investments, anchored by three flagship programmes: the Family Card, Farmers' Card, and the Religious Personnel Honorarium Programme.
