Suffi Al Mahmud: The proposed national budget for 2026-27 fiscal year has been presented by supporters as evidence that Prime Minister Tarique Rahman understands the aspirations of the people. Unveiled on Thursday, the incumbent BNP-led government’s first budget seeks to reflect public expectations while balancing ambition with economic realities during a challenging period for the country.

The finance minister has attempted to chart a course that addresses a broad range of national priorities, including the expansion of domestic and foreign investment, job creation, universal social protection, balanced regional development, a production-oriented economy, discipline and stability in the financial sector, energy security and relief for citizens facing pressure from global economic and geopolitical uncertainties.

Taken together, these objectives closely mirror the concerns and expectations of the public.

To ease the cost of living and stabilise commodity prices, the budget proposes reducing source tax on 60 products. For essential agricultural and consumer goods – including paddy, rice, wheat, potatoes, livestock, poultry, fish, onions, garlic, ginger, salt, sugar, edible oil and seeds – the source tax rate would be reduced from existing rates of 5%, 2% or 1% to just 0.5%. Such measures are intended to provide direct relief to consumers while supporting producers.

The budget also includes commendable initiatives for the education sector. Plans to provide school uniforms, shoes and bags for underprivileged students, alongside expanded inclusive education for disabled and special-needs learners, have been widely welcomed. If implemented effectively, the proposed reforms in education and healthcare could further strengthen the transition towards a skills-based economy.

The decision to increase allocations for agriculture is equally significant. Agriculture remains one of the principal drivers of the national economy, and the budget places particular emphasis on supporting farmers and boosting agricultural productivity. At the same time, facilitating production in trade, commerce and industry is essential for sustaining economic growth.

Among the most notable announcements in the proposed 2026-27 budget are measures to recover money allegedly laundered abroad and strengthen international legal cooperation for that purpose. Supporters have described the proposal as one of the boldest budgets in Bangladesh’s history. Alongside initiatives aimed at improving the ease of doing business, the budget also includes measures designed to protect domestic industries. Its targets for reducing inflation, increasing investment, expanding social protection and securing long-term growth have been broadly praised.

The budget further proposes reopening closed factories and strengthening support for micro, small and medium-sized enterprises (MSMEs), measures that could serve as important catalysts for economic recovery and employment generation.

However, questions have arisen regarding implementation. Economists and analysts, including those from the Centre for Policy Dialogue (CPD), argue that the government will face significant challenges in translating its ambitions into reality. They point to shortcomings in both “institutional capacity” and the “realistic foundation” necessary to execute the programme successfully.

According to CPD, achieving the target of mobilising an additional Tk 5.88 lakh crore in resources would require revenue growth of approximately 25 to 30%. Generating such a substantial increase within a single fiscal year will be extremely difficult. Economists also warn that if revenue collection falls short while expenditure remains unchanged, the government may face increased reliance on domestic and foreign borrowing. In particular, concerns have been raised about the scale of planned foreign borrowing and the burden of future repayments, which could place pressure on the broader macroeconomic environment.

Supporters of the government nevertheless argue that implementation is achievable if the Prime Minister continues his close monitoring of developments across the country. They contend that success depends largely on progress in three key areas.

First, public awareness regarding tax compliance must be increased.

Second, corruption and waste must be reduced.

Third, money laundering must be prevented and previously laundered funds recovered.

If these three objectives can be achieved, supporters believe the budget’s implementation will become far more manageable. Notably, even many of those who view the budget positively remain uncertain about whether it can be delivered effectively.

Revenue collection remains the government’s primary source of funding. Bangladesh has long struggled with a low tax-to-GDP ratio, and a substantial portion of the population remains outside the formal tax net. The budget includes measures aimed at broadening the tax base, but success will depend not only on administrative reforms but also on changing public attitudes.

In many cases, reluctance to pay taxes stems less from inability than from a lack of confidence in how public money is used. Citizens must be encouraged to understand that national development is financed through their tax contributions. Elected representatives could play a vital role in this effort. Members of Parliament, as representatives of the people, can engage directly with constituents and explain the importance and benefits of taxation.

If citizens see a clear connection between their tax payments and improvements in education, healthcare, employment opportunities and infrastructure, they may become more willing participants in the system. Since taking office, Prime Minister Tarique Rahman has travelled extensively throughout the country and established direct communication with the public. Supporters argue that the trust he has developed with citizens could make a national awareness campaign more effective if he chooses to lead it personally.

The second priority is tackling corruption and waste. Studies have suggested that a significant proportion of public expenditure is lost through inefficiency, corruption and misuse of resources. Preventing such losses is therefore essential.

At a time of economic pressure, the government must adopt a zero-tolerance approach towards wasteful spending. Citizens are far more likely to support revenue collection efforts when they believe public funds are being managed responsibly. Supporters note that Prime Minister Tarique Rahman declared a campaign against corruption and waste shortly after assuming office and has already introduced measures aimed at reducing government expenditure.

These initiatives reportedly include cost-cutting measures within the Prime Minister’s Office and restrictions on unnecessary foreign travel. Such steps have received praise from supporters, who argue that maintaining this momentum could help Bangladesh reduce the influence of corruption and improve public confidence in government institutions. They hope the Prime Minister will continue to take strong action in this area.

The third and perhaps most critical challenge is preventing money laundering and recovering funds already transferred abroad.

According to figures cited in parliamentary records and reports prepared by the White Paper Preparation Committee established to assist economic reconstruction, an estimated US$234 billion was allegedly laundered out of Bangladesh during the 15-year rule of the Awami League government between 2009 and 2023. At current exchange rates, this is equivalent to nearly Tk28 lakh crore.

The report further claims that, on average, approximately US$16 billion – equivalent to between Tk1.8 lakh crore and Tk2 lakh crore – left the country illegally each year during that period. Supporters argue that recovering even a portion of these funds could significantly strengthen the economy.

The budget includes specific commitments aimed at recovering laundered wealth, and proponents insist that this issue should receive the highest priority. They criticise the previous Yunus administration, arguing that it failed to take effective measures during its 18 months in office to recover illicitly transferred funds. They further allege that official efforts during that period produced little tangible progress while consuming public resources.

Supporters of the current government maintain that a neutral investigation into allegations of money laundering under all previous administrations is necessary. They argue that effective recovery efforts, combined with stronger safeguards to prevent future capital flight, could help restore stability to the banking sector, strengthen public finances and boost confidence in the economy.

For these reasons, supporters reject claims that the budget is unrealistic or impossible to implement. They argue that such assessments underestimate the determination and judgement of the current political leadership. Confidence among supporters remains high because they believe Prime Minister Tarique Rahman is committed to public welfare and national development.

The challenges are undeniably substantial. Yet with stronger tax compliance, a sustained drive against corruption and a serious effort to recover and prevent money laundering, supporters believe the budget’s goals remain within reach. If these priorities are pursued effectively, they argue, Bangladesh can move closer to the prosperity and economic potential envisioned in the budget.