No matter how tight the budget is, the social safety net sector has to be given its due importance.

The meeting was presided over by Prime Minister Sheikh Hasina at the cabinet room of the Jatiya Sangsad Bhaban

Every media outlet is already flooded with news about the annual budget for the 2024-25 fiscal year to be placed at the parliament tomorrow

For air conditioner and refrigerator manufacturing industries, the government plans to extend the existing facility to June 2026, according to the finance ministry.

The development comes after Bangladesh Bank relaxed the rules and allowed banks to receive funds from the OBUs amounting to up to 40 percent of their regulatory capital to settle payment obligations.

With an aim to restore macroeconomic stability, reduce inflation, and contain pressure on foreign currency reserves, Finance Minister Abul Hassan Mahmood Ali is going to place a Tk 7,96,900 crore budget for the 2024-25 fiscal year tomorrow.

For instance, the outlay for the health sector was Tk 25,028 crore in 2021-22, representing 4.8 percent of the budget of Tk 518,188 crore. It was five percent in the previous fiscal year when the government spent Tk 21,647 crore under a Tk 460,160 crore budget.

The subsidies and incentive expenditures in the upcoming budget are going to be more than that of the current fiscal year.

The national budget of FY2024-25 is set to be announced at a time when Bangladesh’s economy is going through a difficult phase.

The national budget for the fiscal year of 2024-25 is going to be presented in parliament on Thursday with monumental tasks ahead for the government to collect more revenues and contain stubbornly high inflation.

Fighting raging inflation and putting the economy back on track have not been taken seriously as evidenced from the government’s delayed response, which set the scene for one of the worst economic crises in its history and an unprecedented prolonged period of higher consumer prices, said an economist. 

The government is expanding the size of the national budget every year. However, it has fallen short of attaining its targets over the years, be that in terms of revenue collection or development expenditure.

In FY22, the spending on public services increased to 15 percent of the total actual expenditure, nearly double the rate in FY09. Similarly, spending on the transport and communication sector surged to 12 percent from 4.7 percent in FY09.

As the government wants to lower expenses, it is likely to contain the budget deficit to 4.6 percent of gross domestic product in the next fiscal year, a level seen a decade ago.

However, the minister did not respond when journalists asked how the budget could be expansionary when it will increase by only four percent compared to the current budget.

The government’s allocation to repay foreign debts may reach Tk 57,000 crore in the next budget, a 53 percent rise from the current year, putting further pressure on the country’s dwindling foreign currency reserves.

The government has to spend about 40 percent of the next budget on subsidies, interest payments, and salaries and allowances of government employees, which will limit its ability to spend on social safety net, health and education.

Bangladesh does not have a dedicated nutrition budget. On top of that, ministries don’t utilise the full funds allocated to them for nutrition related activities, said speakers at an event yesterday.

Mobile phone calls and metro rail commutes among other daily activities may cost more in the next fiscal year as the government looks to increase taxes to boost its revenue collections.

Education and health sectors are set to get less Annual Development Plan allocation than prescribed in the eighth five-year plan.