Bangladesh’s health sector has long advanced through a paradox. On the one hand, millions of people fall into financial hardship every year due to healthcare expenses; on the other, public dissatisfaction continues to grow over capacity, workforce, infrastructure, and the quality of services within the government healthcare system. Against this backdrop, the record allocation of Tk 69,409 crore to the health sector in the proposed national budget for FY2026-27—equivalent to 7.4 percent of the total budget—signals a decisive political and policy shift. But as always, the real test is whether this allocation can be utilised to produce tangible improvements in health services and outcomes.
This allocation is 65 percent higher than the proposed health budget of the outgoing fiscal year and nearly double its revised allocation of Tk 35,477 crore. Health expenditure as a proportion of GDP has also doubled. However, the significance of this budget depends not on the size of the increase alone but also on where the increase has come from, how the allocated funds will be spent, and to what extent citizens will derive benefits from it.
Like most ministries, the budget of the Ministry of Health and Family Welfare consists of two major components: the operating budget and the development budget. The operating budget covers human resources, medicines, equipment, maintenance, and routine operations, while the development budget finances approved projects, major equipment procurement, and infrastructure investments. The most notable feature of the FY2026-27 health budget is a special block allocation of Tk 23,522 crore within the development budget.
Since the BNP government assumed office in February, it did not have sufficient time to formulate, obtain approval for, and incorporate election manifesto commitments into the budget through the regular project approval process. For the same reason, the operating budget has not received any substantial increase beyond routine annual growth and incremental adjustments. Consequently, the government has allocated a large block of funds within the development budget to finance its electoral commitments.
The dramatic increase in the health budget is not primarily driven by growth in operating expenditures; it stems from this special block allocation. The critical question, again, is how effectively these resources can be utilised.
One of the persistent challenges in the sector has been its limited capacity to utilise allocated resources. In recent years, a significant portion of allocated funds has remained unspent. Delays in project implementation, procurement bottlenecks, poor coordination, and administrative weaknesses have particularly hindered development budget execution. Consequently, questions remain regarding the extent to which development spending ultimately benefits ordinary citizens. To ensure meaningful outcomes, infrastructure development must be complemented by adequate human resources, equipment, management systems, financing mechanisms, and accountability frameworks.
Against this backdrop, the Tk 23,522 crore block allocation presents both a significant opportunity and a source of concern. Unless it is implemented effectively, achieving the desired outcomes will be difficult.
Given that the formulation and approval of new projects require lengthy administrative and institutional processes, a one-year timeframe is relatively short. Therefore, the health ministry and its agencies must adopt a proactive and forward-looking approach. If project identification, design, approval, and the issuance of necessary government orders can be completed within the first three months of the upcoming fiscal year, substantial progress could still be achieved during the remaining nine months. Preparations for utilising the block allocation should, therefore, begin immediately.
The first step is project selection. Several considerations should guide this process. Some projects should generate immediate and visible benefits for citizens, while others should focus on structural and institutional transformation of the health system. Although the benefits of such reforms may not be immediately apparent, they are essential for ensuring the long-term sustainability of the sector.
The budget speech and the government’s election manifesto have already outlined several priority programmes and initiatives. These include union- and ward-level primary healthcare units in rural and urban areas, respectively; a national ambulance network; an e-health card programme; restructuring district and upazila health systems; recruitment of 5,000 physicians and 100,000 health workers; a national nutrition programme; and strengthening medicine and vaccine supply systems. In addition, the manifesto identifies several structural reform initiatives aimed at expanding healthcare services and advancing universal health coverage. These priorities can serve as a valuable policy framework for budget implementation.
Alongside these initiatives, several additional measures deserve consideration.
Maternal health presents a unique opportunity for transformative intervention. Bangladesh records approximately 3,000 to 4,000 maternal deaths annually among nearly three million births.A universal maternal healthcare package could be introduced to ensure access to antenatal care, safe institutional delivery, and postnatal services. An annual investment of approximately Tk 15,000 crore in such a programme could substantially reduce maternal and neonatal mortality. To maximise accessibility, these services could be delivered through government health facilities as well as designated private hospitals.
Another major challenge within our healthcare system is the catastrophic health expenditure. Many families become impoverished while paying for the treatment of cancer, kidney disease, heart disease, and other costly non-communicable conditions. To address this challenge, the government could establish coverage limits for patients with specific illnesses and reimburse healthcare providers directly for services rendered. Such an approach would help protect low- and middle-income families from financial ruin.
Emergency medical care for road traffic accident victims also warrants innovative solutions. At present, many private hospitals remain reluctant to admit accident victims. If the government supports the upgrading of trauma centers along the major highways as well as emergency departments in designated private hospitals, and guarantees reimbursement for the latter’s treatment costs, countless lives could be saved. Public-private partnerships offer a practical pathway to improving emergency care services.
The government’s proposed e-health card initiative could also become a cornerstone of health sector reform. However, issuing a digital identification card alone will not produce meaningful change. If the card is linked to a defined package of health entitlements or financial coverage for each family, citizens will gain a clear understanding of the services they are entitled to receive. Patients will then have a stronger legal and moral basis to demand medicines, diagnostic services, and other healthcare benefits when these are not provided.
While development spending often receives greater attention, the effective utilisation of the operating budget is frequently overlooked. Yet it is the operating budget that finances hospital operations, medicine supplies, diagnostic services, equipment maintenance, and the day-to-day functioning of healthcare workers. In many cases, buildings and equipment financed through development projects remain underutilised because operating budgets are insufficient to support their full use. As a result, the effectiveness of development investments is diminished.
To improve the utilisation of operating funds, the Directorate General of Health Services (DGHS) could establish a support centre staffed by procurement and supply-chain management specialists. At the same time, a strong coordination cell should be established at the ministry level to ensure accountability across the relevant agencies. Such a coordination mechanism could regularly monitor implementation progress, identify bottlenecks, facilitate inter-agency collaboration, and provide effective leadership and oversight.
Finally, the FY2026-27 health budget has created a significant opportunity for Bangladesh’s health sector. After many years, the country has received a level of allocation that could lay the foundation for meaningful structural transformation. However, turning this opportunity into tangible success will require rapid decision-making, efficient project management, stronger institutional capacity, effective coordination, and robust accountability mechanisms. Only then will this record allocation translate into better health outcomes and consequently greater trust in the healthcare system.
Dr Syed Abdul Hamid is professor in the Institute of Health Economics at the University of Dhaka.
Views expressed in this article are the author's own.
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