The budget is big. But the gloom that hangs over it is bigger. It is not that the budget is not well-meaning and lacks aspiration. Far from it. It has got all indications of public welfare. Tk 3,00,000 crore development budget speaks for itself. Corporate taxes have been kept unchanged or reduced in some cases.
Above all, social safety measures, said to be the cornerstone of the budget for the 2026-27 financial year, with family and other cards being piloted across regions as part of the BNP government’s election pledges, speak volumes of the government’s intention to provide ordinary people with a bit of relief.
As pledged, health and education budgets have been significantly increased — education to 2 per cent from 1.53 per cent and health to 1.01 per cent from 0.58 per cent of the gross domestic product.
Import duty on renewable power systems has been kept nil whilst electric vehicles get a sizeable waiver. Fossil fuels have been levied with extra duties. This indicates a greener future.
But where does the gloom come from? It comes from the swampy ground on which the budget has been prepared.
The growth of the private sector has for long been on hold. First choked by the Covid outbreak, many private entrepreneurs had to either roll back or downsize their business operations. They struggled to repay bank loans and many ultimately defaulted. The smear of being a defaulter is still on many faces.
Hardly had the Covid impacts been over when the Ukraine war came, with all its limiting impacts. The supply chain was again blocked, with the United States slapping sanctions that narrowed the scope for raw material imports.
And then came the 2024 political changeover, when the autocratic Awami League government was overthrown by the student-led uprising. Businesses aligned with the government were also thrown into uncertainty, with many entrepreneurs going into hiding and some managing to stay afloat by maintaining a mere existence.
Till today, when an elected government is in power, the confidence of private-sector entrepreneurs has remained at its lowest. The high interest rate, coupled with a deep sense of insecurity, has been a stumbling block in the way of fresh investments. There has been hardly any investment, both local and foreign, worth mentioning.
The injection of printed money into the banking channel by the fallen regime to cover up an orgy of plundering in the sector has led only to the weakening of the taka and rising inflation, now hovering near 9.5 per cent.
High prices on the back of high inflation are still giving people hard times. Ask the fixed-income group and they will say how difficult they find it to maintain their families, with prices of daily commodities, education and health services rising every day.
And the perennial shortage of revenue in public coffers because of a small tax net has led to big borrowings from both foreign and local sources, putting a huge burden of debt servicing on the government.
Standing on this boggy land, finance minister Amir Khosru Mahmud Chowdhury proposed the budget in parliament on Thursday with promises and bright projections, and also with a Tk 2,43,000 crore deficit to be replenished with borrowings.
With examples of the poor implementation of budgets by previous governments because of incapacity, corruption and mismanagement, it remains to be seen how this budget, with all its glittering promises, will be implemented.
