After nine and a half months since the interim government took charge, structural challenges remain – with no early signal to address them, and no organic link between the national budget and reform agendas, said economist Dr Debapriya Bhattacharya on Monday.
He boldly stated: “We are not seeing structural transformation and reduction of anti-equity biases in economic reform and budget preparation.”
Bhattacharya, also convenor of the Citizen’s Platform for SDGs, who organized the discussion, said that bureaucrats that supported a “thief regime” under the previous Awami League government were now reappearing after remaining inactive following the events of August 5 last year.
Even the country's bureaucracy has become stronger after the fall of the previous government. The politicians have fled, businesses are dying, and bureaucrats have reemerged in full force.
The recent move by the government to dissolve the National Board of Revenue (NBR) and split it into two parts was not as prescribed by the White Paper Committee. The government did it in haste without consulting the stakeholders.
Debapriya, also head of the White Paper Committee, made the remarks at an event titled “Bangladesh Economy 2025-26: Policy Reform and National Budget,” on Monday.
Delivering his keynote presentation, he said: “The government has paid little attention to economic reforms compared to other types of reform. The budget is not solving the historical problems that are inherent in it. First, we are not seeing the structural transformation. Second, we are not seeing the steps we expect in the budget to be taken in favor of the poor to overcome the anti-equity bias that exists.”
“Interest payments and subsidies will consume 75% of government revenue. A large portion of the remainder will be spent on public sector salaries. As a result, the government will need to rely on both domestic and foreign borrowing to implement its development budget. Overall, we are not observing any structural shift in budget allocations,” he explained.
Revenue mobilization
The presentation also shows that more than 95% of the revenue mobilization has been spent on operating expenditures. The rest is not enough to make amortization payments for foreign loans. Hence, there is no contribution from revenue mobilization for ADP financing. No real change in the ADP structure.
“Only 30% of social security funds directly reach the poor, while the remaining 70% do not benefit them. At the same time, food sales through trucks — targeted at the urban middle class — have increased by 7%, while the rural food-for-work program has been reduced by 40%. This is contributing to growing inequality,” Bhattacharya pointed out as inefficiencies in social security spending.
He also pointed out that the upcoming budget for FY26 would be shaped by three key deficits: a lack of cooperation and inclusivity, poor coordination, and limited transparency.
Regarding inflation, he said: “We have yet to see the effects of monetary policy in curbing inflation. Much of the decline has come from supply-side improvements and a stabilized exchange rate.
“The tax-to-GDP ratio remains below 10% and will likely stay that way in the next fiscal year.”
BNP Standing Committee member Amir Khasru Mahmud Chowdhury said that the budget was being prepared based on a questionable GDP (gross domestic product).
“Through this, we are seeing the continuation of the budget of the previous fascist government. We need to ask ourselves how much the country's current economic and global background has been considered in preparing the budget.”
Chowdhury commented that there is excessive control in the field of business and commerce in Bangladesh.
“Bangladesh has much more control compared to other countries. In the past, we have seen looting through control. The more control you impose, the more looting will happen. We have to get out of here. We have to respect others’ opinions even if we disagree with them. If we cannot bring about this political change along with economic change, we will not be able to move forward. We have to get out of conflicting politics.”
He gave an idea of what Bangladesh’s economic model should be in the future. He said: “We are open for business”; this will be the country’s economic model in the future.
Tasneem Siddiqui, chairperson and founder of the Refugee and Migratory Movements Research Unit (RMMRU), criticized the lack of structural reform in labor migration systems.
She said that although Malaysia is reopening its labor market, preparations are underway following the outdated framework. Training institutions have been established — around 40 in total — but most are non-functional due to the absence of qualified trainers.
Even when a few trainers are brought in from other places, it is far from adequate, she added.
