The updated budget for the current fiscal year may see an increase in operating expenses even while development investment has not accelerated. Increased allowances for government workers, capital support for bank mergers, interest payments, and subsidies are projected to cause the operational budget to rise marginally beyond the initial estimate. Therefore, significant cuts to the national budget as a whole are unlikely to occur this time.

In light of this, Dr. Salehuddin Ahmed, the government’s economic adviser, will preside over tomorrow’s (Monday) meeting of the Coordination Council on Fiscal, Monetary, and Exchange Rate Policies.

According to budget implementation data, in the first three months of the current fiscal year, total government expenditure rose by around 21% compared to the same period last year, reaching Tk 101,098 crore. During this period, the government spent Tk 54,571 crore on interest and subsidies, accounting for about 55% of total operating expenses.

An official from the Ministry of Finance, involved in the budget preparation process, told media that the interim government had, for the first time in history, reduced total expenditure by Tk 7,000 crore compared to the previous year, announcing a Tk 7,90,000 crore budget to make it more realistic. However, spending under the operating budget has already risen significantly.

Therefore, even though development expenditure may decline, there is little room for major reductions during the upcoming budget revision. In previous years, revised budgets typically saw reduced spending, but this year is expected to be an exception, though the government is still taking measures to avoid unnecessary expenses.

Sources at the Finance Division said the government aims to finalize the revised budget by December, ahead of the national elections scheduled for mid-February 2026. As part of this process, all ministries and divisions were instructed to submit their revised allocation proposals by November 9. Based on these submissions, the revised budget framework will be finalized and reviewed at tomorrow’s Coordination Council meeting, which will be held virtually, chaired by Dr. Salehuddin Ahmed, and attended by advisers for planning, commerce, and food, along with secretaries of relevant ministries, the Bangladesh Bank governor, the finance secretary, and the NBR chairman.

Since the start of the FY2025–26 budget in July, the government has increased salaries and several allowances for public servants. Recently, house rent allowances for MPO-listed teachers were also raised, adding roughly Tk 4,000 crore to operating expenses. If the government proceeds with implementing recommendations from the Pay Commission, costs could rise even further. The commission is expected to submit its report by December, and partial implementation during the current administration is being actively considered.

Finance ministry officials further noted that spending related to the upcoming national election may exceed projections, with around Tk 1,000 crore already allocated for the Election Commission, though more funds may be needed. Additionally, the government plans to merge five struggling Islamic banks, injecting Tk 20,000 crore in capital into the new entity. All these factors are expected to push up operating expenditures in the revised budget.