The government has proposed Tk 69,409 crore for the Health Services Division and the Medical Education and Family Welfare Division in the fiscal year 2026–27, nearly doubling last year’s allocation amid a series of tax and duty exemptions aimed at reducing treatment costs.
Finance Minister Amir Khasru Mahmud Chowdhury announced the measures while placing the proposed national budget in parliament yesterday afternoon.
Alongside the higher allocation, the government proposed removing VAT and advance income tax on imported dialysis filters, withdrawal of VAT at the supply stage of heart stents, and exemption of VAT on intraocular lenses used in cataract surgeries. The measures are expected to reduce dialysis costs by up to Tk 800 per session, save up to Tk 20,000 per stent, and lower lens prices by around Tk 5,000.
The health sector allocation accounts for about 7.4% of the total budget and around 1.02% of GDP. In the revised FY2025–26 budget, the allocation stood at Tk 35,477 crore, or 0.58% of GDP.
In his budget speech, the finance minister said strengthening healthcare is essential for sustainable development, adding that despite heavy investment in infrastructure and procurement, service quality has not improved as expected.
He noted that hospitals are under severe patient pressure, while many citizens are increasingly seeking treatment abroad, leading to foreign currency outflows.
The government has also proposed duty concessions on raw materials for medical device manufacturers and the withdrawal of duties and VAT on 77 key pharmaceutical inputs, including materials used for anti-cancer drugs, APIs and export-oriented products.
Additionally, full exemptions have been proposed on imports of 21 categories of assistive devices for persons with disabilities to improve access and promote inclusion.
Public health expert Dr Tajul Islam A Bari said efficient utilisation of funds remains more important than higher allocations, noting that 30%–40% of health budget allocations often go unspent. He called for improved medicine supply in public hospitals, sero-surveys for measles immunity, investment in EDCL, and expansion of ventilation facilities.
Another expert, Dr Mushtaq Ahmed, stressed the need for skilled manpower and stronger management to improve service delivery, particularly at district and upazila levels, along with expansion of ward-based health centres.
Health spending in neighbouring countries
Nepal allocates around 4.85% of its national budget to health, India about 2% of its central budget, while China allocates roughly 8% of total government expenditure to health and sanitation.
