On Wednesday (June 4), BNP Standing Committee member Amir Khasru Mahmud Chowdhury gave the party’s official response to the budget.
The first budget after the July 2024 uprising. At the same time, it is a major policy-making occasion before the upcoming national elections. The fallen dictatorial government has left the economy in ruins. One of the pledges of the July uprising was a fair and non-discriminatory system. The priority of the people’s livelihood. That is why the budget for the 2025-26 fiscal year is an important financial plan. It also carries deep significance from a political and social perspective.
The great liberation war of 1971, the anti-dictatorship movement of 1991 and the July-August uprising of 2024 are the struggle for democracy. The annual budget is a fundamental pillar of democracy. The budget is a financial report of the strategy and implementation framework to reflect the mandate and priorities received from the people of the political government. The elected representatives of the people through free and fair elections, after each round of scrutiny and deduction, provide the legal framework for the fundamental rights of the people. History testifies that the ‘Magna Carta’ limited the absolute power of taxation. In the UK, the ‘Glorious Revolution’ strengthened the authority of Parliament over taxation and expenditure. “No taxation without representation” – this slogan is the foundation of the American Revolution.
We could have set a groundbreaking precedent. The Bangladesh Nationalist Party is cooperating with the interim government in every field. We expected that the interim government would formulate the budget by establishing a minimum national consensus in consultation with the agitating political parties. If the interim government wanted, it could have taken the opinions of people from different classes and professions of the society. Experts, civil society, businessmen and youth representatives could also have participated. Then the budget would have been a symbol of a unified economic vision. This budget would have become a reflection of the different voices of the country. But that opportunity was not utilized. Budget formulation would not have been one-sided, non-participatory and traditional. New thinking would have been reflected.
This dialogue was even more urgent in the current special circumstances. The interim government says that it will complete the elections between December and June. That is, the elected government will come in by the 2025-26 budget year. Many countries that follow the Westminster tradition have “interim governance customs”, which Bangladesh does not have. If a general election is imminent or there is a possibility of a new government, there is a different way to approve the budget. The interim government does not make major changes to the policy framework. It does not make significant tax adjustments or new, large-scale financial commitments.
If there was political dialogue, there would have been a realistic realignment of expenditure allocation based on consensus. There would have been a direction for getting rid of the crisis of spending in the lives of the common people caused by the unlimited and unfriendly policy framework of the autocratic government, which has arisen in the long term due to high inflation. Currently, inflation is almost double digits, and it is being said to reduce it to 6.5%, which does not seem realistic. The rate of poverty growth could have been curbed. According to World Bank data, more than 2.7 million people have become poorer than before during the interim government’s tenure. Of these, 1.8 million are women. Real income has decreased as the wage growth rate is below inflation. In addition to increasing poverty, it has also put pressure on consumer spending. Due to the stagnation of domestic and foreign investment, employment has decreased in almost all formal and informal sectors. As a result, society has been divided; the number of poor people is increasing. Agricultural production growth is the lowest in the last decade. During this time, the growth rates of the agriculture and service sectors in the country have decreased by 1.51 percent and zero.58 percent respectively. According to BBS calculations, GDP growth in the 2024-25 fiscal year was 3.97%. This year’s budget has been set at 5.6%, which is unrealistic and paper growth like the previous government. Food security is under threat. Despite attempts to increase allocations by including pensions and agricultural subsidies in the inadequate, flawed, and corrupt social security sector, government allocations for social security remain inadequate. To date, social safety net programs have not been rights-based.
The reduction in allocations in important sectors like education, health, and agriculture is worrisome. Only 5.9% of the budget has been allocated to agriculture, 5.3% to health, and 14% to education. Private universities, medical colleges, colleges, and schools could have been brought under full tax exemption. In our time, God willing, all these areas of education will be brought under full tax exemption. This would have fulfilled the educational aspirations of the young society. It would have helped build a society based on social equality and merit. Poor educational outcomes and the high rate of youth not getting higher education, employment, or training are obstacles to achieving the demographic dividend. Without long-term investment in these sectors, progress in human resource development and poverty reduction is not possible. It is becoming difficult to achieve the Sustainable Development Goals by 2030. Currently, 96% of investment in the country comes from domestic savings. That is decreasing rapidly. Due to the lack of a specific road map for the elections, investors are not getting confidence due to political uncertainty. So it can be said that there is no DFI. The budget is also completely silent on this issue.
A clear outline was needed to address the weaknesses of the economic structure. The main goal should have been to present a roadmap for increasing private investment. It was necessary to prioritize setting up industries, creating jobs, education, health and agriculture in economic recovery. It was necessary to create more new entrepreneurs by supporting small, cottage and medium sectors. Additional taxes and duties along with huge interest rates will create great pressure on the industry. In particular, the productive sectors will be affected. Many institutions may close. Employment may also decrease. If the financial pressure on the middle and lower classes increases, economic instability may increase. Progress in poverty alleviation may also stall.
Entrepreneurs will face an uncertain and hostile environment as there is no specific plan to reduce the cost of running a business, reduce bureaucratic complexity and reduce the ‘cost of doing business’.
Digital entrepreneurs will come under pressure due to increasing taxes on online businesses. This sector could have played a major role in creating new jobs and digital transformation. The frustration of young entrepreneurs will increase. Innovation will also be discouraged.
The fragility of the financial sector has not gone away. Ordinary investors in the capital market have remained neglected. The financial condition of banks is fragile. Steps like recovery of defaulted loans, recovery of laundered money and expansion of the tax net would have created a new basis for revenue collection. The government is overly dependent on the banking sector. ‘Borrow to repay debt’ is a threat to financial stability in the long term. The opportunity to turn black money into white is rewarding tax evaders. This is unfair to regular taxpayers. Confidence in the tax system may decrease. Changes in tax rates in income tax slabs will further impact most taxpayers. Instead of preventing tax evasion and fraud and expanding the tax net, the burden of taxes has been placed on the shoulders of the general public through increasing VAT as usual. Prices of goods have gone up. The standard of living is declining.
There is no clear direction to close or reform unnecessary, corrupt and inefficient development projects. It is necessary to review the economic results of these projects. If necessary, a review or renegotiation can be done. This will make it possible to reduce expenses and increase allocation for public welfare.
BNP’s 180-day plan
A transparent, participatory and innovative economic plan is needed to restore economic stability, gain people’s trust and build a solid foundation for the future. It is time to leave the conventional and take bold and far-sighted decisions. Only then will the horizon of hope, trust and reconstruction be opened for the nation.
In many countries of the world, political parties publish plans for what they will do in the first 100 days after being elected. As a party of people’s empowerment, BNP wants to introduce such a realistic culture in Bangladesh. Our goals and plans will be determined before the election in the first 180 days after being elected by the people and forming the government.
An action-oriented roadmap will be formulated based on this 6-month plan. We will clearly highlight the steps that BNP will take in different sectors. Here is a summary:
Education System:
· Increase the economic benefits and social status of primary school teachers and bring them under special training programs.
· An expert committee will be formed comprising of national and expatriate educationists, professionals and experts. The main objective will be to include practical subjects including multiple languages, sports, culture and personal and professional development in the curriculum from the primary stage.
· Short-term ‘trade courses’ of plumbing, electrician, mechanics, dental hygienist, medical technician etc. will be introduced under government management.
· Effective steps will be taken to increase apprenticeship, internship and industry-academia collaboration to make the education system practical. Initially, this program will be started by establishing relationships with local businesses in universities located in divisional cities. As a result, students will receive hands-on education and create opportunities for widespread entry into working life.
· Seed funding or innovation grants will be provided through a competitive process to commercialize innovative business ideas in colleges and universities at the district level. Its main objective is to create business entrepreneurs from the campus. They will be able to contribute to the country’s economy by implementing new and creative business ideas.
Health Services:
· Multiple programs will be implemented to create vaccination, health education and awareness, with a focus on disease prevention.
· Widespread awareness will be created among the people on healthy living, sanitation and nutrition.
· Specialized training schemes will be started for doctors and health workers. They will become skilled in early detection and prevention of diseases.
· Modern purification systems for safe water supply and reservoirs for rainwater collection will be built across the country in phases. People will get safe water.
Women Empowerment:
· ‘Family Card’ will be introduced for 50 lakh poor rural families in the initial phase out of about 4 crore marginal families. This card will be issued primarily in the name of the female head of the family. They will be provided with financial assistance or necessary food assistance every month by the state. Through this, the economic empowerment of women will be ensured and the families will gradually become self-sufficient.
· Women’s safety will be given utmost importance. Arrangements will be made for exemplary punishment of rapists and oppressors in the judicial process.
· A dedicated support cell will be established for women at the union level. There, female doctors, lawyers and human rights activists will ensure all-round support for any humiliated woman as needed.
· To increase women’s self-reliance, low-interest loans will be provided to small, cottage and medium industries based on merit. They will be provided with necessary training and development and marketing support.
Recognition of martyrs:
· A list of all martyrs in the July 8 Uprising and the 16-year anti-fascist movement will be prepared and government establishments in their respective areas will be named after them. The families of the martyrs will be provided with state recognition and financial assistance.
· Democracy-loving people who have become disabled or have lost their eyes in the mass uprising and anti-fascist movement will also be given recognition and job assistance.
Agriculture sector and rural development:
· A ‘Farmers Card’ containing necessary information including the amount of land and ledger in the name of the farmer will be introduced. For sharecroppers and small farmers, the entire production cost for at least one seasonal crop will be borne by the state. As a result, production will increase and agricultural land will not remain uncultivated. Employment will also be created for the landless.
· The state will take the initiative to purchase directly from farmers at the union level on the basis of fair prices and the work of building cold storages will begin nationwide.
· The agricultural sector will be made export-oriented by creating opportunities for processing, quality improvement and entry into the international market for agricultural products.
· Area-based databases will be created. Targeted policy support will be provided by determining the data of farmers’ land and the amount of crops produced.
· Strict and visible steps will be taken against extortion, middlemen and the syndicates left behind by fascism to control the prices of goods in the market.
· Canal digging activities will be started extensively across the country. Programs will be taken to protect farmers from floods and droughts. Through this initiative, water supply and drainage systems will be improved.
· Through maximum use of digital technology, the rural economy will be activated, small and cottage industries will be expanded, skills will be increased through training, new employment opportunities will be created, and manpower will be exported.
Industrial sector:
· BNP plans to increase FDI-GDP target from 0.45% to 2.5% in the $1 trillion economy roadmap.
· BNP wants to set a GDP target of $1 trillion by 2034.
· Pulling the reins of additional taxes from the shoulders of the people.
· Domestic and foreign investment will be attracted by adopting investment-friendly policies for the development of the industrial sector. Priority will be given to projects that create a large number of jobs.
· To facilitate investment, a “one-stop service” will be implemented to ensure banking support, starting from company registration.
· Agriculture, fisheries and other production-oriented sectors will be given priority for creating new industries.
· Visible initiatives will be taken to restart medium and large industries, including jute mills, textile mills, sugar mills, etc., that were closed during the Awami League misrule.
Information Technology Sector:
· Nationwide production facilities, digital platforms and training programs will be undertaken for the development of small and medium industries. They will be able to establish themselves as suppliers on international platforms and sell their products worldwide.
· Initiatives will be taken to open offices of social platforms such as Facebook, Google, YouTube, etc. in Bangladesh.
· Initiatives will be taken to start the activities of e-commerce companies including PayPal and other payment methods in Bangladesh on a priority basis for the convenience of freelance youth.
· Competency-based training programs and human resource development activities will be taken at the district level to encourage freelancing, outsourcing and data processing.
Expatriate Welfare:
· The life, dignity and safety of expatriate workers will be ensured. Harassment-free services will be ensured in all areas including airports.
· Encouragement, opportunities and incentives will be provided to expatriate Bangladeshis to invest. For this purpose, Bangladeshi embassies abroad will be mobilised. Investment policies, special benefits and economic climate will be highlighted to expatriates by organizing a special ‘Trade and Investment Fair’ for expatriates.
· After analyzing the employment needs of countries where Bangladesh regularly exports manpower, vocational and technical education programs will be launched based on the need for skills and capabilities, and projects will be taken up for exporting skilled manpower abroad.
Urban Management:
· To ensure safe travel for women at all times, ‘women-only’ buses will initially be introduced on various routes in Dhaka. Women will also be there as drivers and assistants on an experimental basis.
· Priority-based activities will be taken in coordination with experts from home and abroad to solve traffic problems. In addition to using artificial intelligence in traffic lights, strict enforcement of traffic laws, increasing public awareness, lane-based vehicle plans, etc. will be implemented. Traffic jams in the city will be reduced by increasing the efficiency and safety of the road communication system.
Environmental Management:
· A program to plant 250 to 300 million trees in 5 years has already been announced. Tree planting programs and tree fairs will be organized on a large scale from the grassroots to the capital.
· Initiatives will be taken to build a ‘Green and Clean’ Bangladesh by increasing the number of open fields in every union and every police station of the metropolis and ensuring the protection and improvement of the natural environment at the local level through planting trees, creating green belts and environmentally friendly management.
· Jute bags will be encouraged by banning polythene. All ‘eco-friendly’ and ‘sustainable’ products will be encouraged.
Law and Order:
· A strict stance will be taken against all forms of anarchy including rape, robbery, extortion, theft, etc. through zero tolerance. The culture of impunity will be ended at any cost and the criminals will be brought under the law.
· Various steps will be taken to increase the morale of the police at the field level, including training, consultation, motivation and monitoring. Through these steps, the professionalism, efficiency and service attitude of the police members will be increased. It will be helpful in ensuring the safety of the people.
Employment-oriented economic recovery
BNP’s main commitment is employment creation. If the government is formed, it will provide new jobs for one crore people.
BNP has created examples of success in the past. When BNP was in charge of running the state, a significant aspect of its development policy was – establishing labor-intensive industries. Along with this, it took initiatives to export surplus labor abroad. This has created jobs for new people. Not only that, people have also entered from one labor market to another. For example, due to the development of the garment industry, people started moving from the rural labor market dependent on agriculture to the cities of garment factories. Along with the increase in the income of the common people, the development of a new urban middle class began. Its direct impact can be seen in our economy, society and culture.
Overall, the growth of gross domestic product from 1978 to 1981 was 2 to 3 percent. In 1991-1996, it increased to 4-5 percent. In 2001 to 2006, it was 6-7 percent.
For overall development and new employment, BNP has set a target of increasing domestic production at 8 percent. BNP has basically prepared a plan for overall development and employment in 10 sectors. These are infrastructure development, manufacturing, agriculture, labor export abroad, ICT and freelancing, service sector, green energy, health and education, small and medium enterprises and others.
Accelerating private sector growth
The BNP government will adopt a multi-pronged strategy to increase investment in the private sector. This strategy will address structural challenges. Create a conducive environment for investment. Encourage innovation. Focus on the following areas:
Simplify regulatory framework and reduce bureaucratic hurdles: Simplify business registration, tax compliance and licensing processes. Company registration and trade licensing will be introduced through digital platforms. These steps will reduce time and costs for entrepreneurs. This will be particularly beneficial for small and medium enterprises and women-led businesses.
Increase access to finance for small and medium enterprises and startups: Expand credit facilities through specialized institutions and state-owned banks. Introduce credit guarantee schemes. Reduce risk for lenders. It will be easier for small and medium enterprises to get loans without additional collateral. Encourage alternative financing methods such as venture capital and crowdfunding. Help startups and high-growth firms.
Investment in infrastructure and industrial zones: Building efficient infrastructure, including transport networks and energy supply, is essential for industrial development. Establish and expand Special Economic Zones (SEZs) and industrial parks. As a result, investment will be attracted. Productivity will increase. Local industries will be connected to the global value chain.
Diversification, productivity and innovation: Although the garment industry plays a major role in exports, it is necessary to diversify exports. Attention will be paid to pharmaceuticals, information technology and agro-processing industries. This will reduce economic risks. Adoption of advanced technology will be supported. Research and development will be encouraged. Innovation, productivity and competitiveness will be enhanced.
Strengthening financial sector stability: For sustainable economic growth, bold reforms in the financial sector are essential. Good governance in the banking sector will be improved. Financial inclusion will be increased. Capital markets will be developed for financing.
Simplifying the banking sector for small and medium enterprises: It is essential to simplify the lending process for small and medium enterprises. With the support of Bangladesh Bank, the dependence on collateral for small businesses will be reduced. Instead of asset-based loans, cash flow-based loans will be emphasized, loans will be given based on business performance and digital transaction history. This will be especially effective in the retail and service sectors. Commercial banks will be encouraged to open separate departments for small and medium enterprise banking. Loan classification and collection systems will be reformed to stop harassment of small businesses. At the same time, the interests of banks will also have to be protected. Agent banking and mobile banking services will be expanded to reach rural entrepreneurs and women-run enterprises. Mandatory credit quotas will be introduced for productive private sectors such as agro-processing, light engineering, information and communication technology, and women entrepreneurs.
Steps to improve capital markets: Strict due diligence and independent audits will be ensured to enhance investor confidence in listed companies. Investment education will be promoted, transaction costs will be reduced and account opening will be made easier to expand the investor base. Digital trading platforms will be modernized, online IPO subscription system will be integrated with it and fintech technology will be incorporated for faster settlement. Pension funds, insurance companies and other financial institutions will be encouraged to invest to create a liquid market for corporate bonds.
Diversification of financial products: Several steps will be taken to diversify financial products. These include: expanding leasing and factoring, creating legal and financial frameworks for venture capital and angel investments, supporting private equity funds, increasing Islamic financial products such as Mudaraba and Ijara options, introducing green bonds and blended finance instruments, providing digital loans through mobile operators and fintech platforms, etc.
Formulation of Energy and Power Strategy: A task force will be formed to determine the ideal mix of natural gas, solar, hydropower and technology for Bangladesh and to plan a system-based plan. This plan framework will be data-based, rich in revenue-cost modeling and consistent with climate goals. Efforts will be made to make the contracts and cost-benefit analysis publicly available. This will restore investor confidence and ensure accountability to the public. More allocation will be made for transmission modernization and digitization in the renewable energy sector. Priority will be given to grid resilience, smart metering and regional interconnection. Emphasis will be given to gas and mineral exploration by strengthening BAPEX. Tax incentives will be provided for investors in renewable and cost-effective technologies.
Blue Economy: Emphasis will be placed on sustainable marine resource management, development of marine-based industries and technologies, conservation of biodiversity and marine environment, improvement of the quality of life of coastal communities, research and innovation and human resource development to achieve economic growth, employment generation, food security and climate resilience through sustainable use of the vast marine resources of the Bay of Bengal. Main sectors: Fisheries and seafood, shipping and ports, offshore gas and mineral resources, renewable energy (marine-wind and tidal energy), marine tourism and recreation and marine research and technology. For effective implementation, integrated “maritime zone” management, international cooperation and regional partnerships, and building skilled manpower and skill development will be taken. To protect the biodiversity of the marine and coastal areas and ensure long-term economic benefits, scientific surveys, mapping and determination of actual reserves of marine resources will be carried out. Based on this information, plans will be taken and implemented for resource extraction and economic use in an environmentally friendly and sustainable manner.
Creative Industrial Economy: Bangladesh has a rich cultural heritage. There is a large young population. Digital infrastructure is also growing. But the creative economy contributes less than 0.5 percent to GDP. In emerging economies, this sector contributes 3-5 percent. These sectors include: film and television production, music and performing arts, animation, VFX and gaming, makeup, clothing and design, content creation for OTT platforms, CGI and creative media service software companies, YouTube, TikTok and the influencer economy, etc.
Trade facilitation and customs regime development: Simplification of customs regime and reduction of trade barriers will increase export capacity. Customs classification will be digitized. Import process, especially for key raw materials, will speed up clearance. It will reduce costs for traders.
Increasing the use of digital financial services: The expansion of digital financial services will increase access to finance. This is especially important for the underprivileged population. Protocols will be established to enable mobile financial services for merchant wallets with high transaction limits. This will facilitate wholesale transactions. It will also make digital payments accessible to businesses.
Improving Corporate Governance and Social Responsibility: Emphasis will be placed on strong corporate governance and corporate social responsibility practices. This will enhance transparency and accountability in the private sector. Businesses will be encouraged to align their activities with the Sustainable Development Goals. This will promote inclusive growth and environmental sustainability.
Strengthening Public-Private Partnership (PPP): It is essential to formulate and implement effective PPP policies. Initiatives will be taken to mobilize private investment in infrastructure and public services. This collaborative approach will improve service delivery. Economic development will be accelerated.
Tackling climate change and green growth: Incorporating climate resilience in economic planning is essential for sustainable development. Platforms like the Bangladesh Climate and Development Platform (BCDP) will be established. Efforts will be made to attract investment in climate adaptation and mitigation projects. The public and private sectors will work together.
Increasing debt management and revenue collection
There are significant risks to macroeconomic stability due to fiscal pressures, monetary policy tightening, and financial fragility. In the interest of long-term stability, an inclusive, equity-based sustainable development path will be adopted through the formulation of a consistent fiscal strategy, structural reforms, and institutional strengthening. BNP has also determined a strategy to reduce the debt burden and increase domestic resource mobilization. Briefly mentioned:
Debt Management Strategy: The government will formulate a ‘Medium Term Debt Management Strategy (MTDS)’ to improve the structure of government debt and reduce the cost of debt collection. In the context of increasing interest payment burden, the government will reduce dependence on short-term debt to reduce rollover risk. The government will stop the contraction in private sector credit flow by optimizing government debt collection by increasing coordination between fiscal and monetary policy.
Expenditure Prioritization and Efficiency Enhancement Strategy: Debt management and subsidies will be rationalized to control domestic interest payments and operating expenses. In this regard, a government expenditure review framework will be formed, strict cost-benefit analysis guidelines for new projects will be formulated, and a performance-based budgeting system will be formulated.
Reducing dependence on short-term debt: The government’s debt will be reduced by reducing dependence on short-term debt. The government sector’s borrowing rate from commercial banks will be reduced and the flow of credit to the private sector will be increased to accelerate economic activities.
Debt-Development-Exchange Strategy: Initiatives will be taken to convert foreign debt into local investment in consultation with lending institutions. The converted money will be used for humanitarian purposes such as increasing climate change adaptation, strengthening education infrastructure, and building health infrastructure. This will also reduce the gap in foreign aid created by the transition from least developed countries. On the one hand, the burden of foreign debt will be reduced, while on the other hand, resources will be directly used to drive sustainable and equitable growth.
Illicit Debt Review and Cancellation Process: A request will be made to the UN Secretary-General to form an independent commission for the review and cancellation process of all debts taken during authoritarian rule.
Modernization of the revenue system: The NBR will be replaced by an autonomous organization. A separate institution called the ‘Bangladesh Tax and Customs Commission’ will be formed to take over the current Customs and Trade Commission to carry out policy formulation work.
Tax Code Modernization: The ‘Tax Code’ will be modernized by prioritizing direct taxes. In addition to making simplification and digital payment systems mandatory, tax coverage will be expanded by establishing offices at the upazila level.
Technology-based surveillance system: Technology-based surveillance system i.e. introduction of tax identification dashboard by integrating electricity bills, bank transactions, land records, etc., blockchain-based tracking for bonded warehouses and artificial intelligence-driven risk assessment will help prevent fraud.
Green Tax Framework: Carbon tax will be imposed on high carbon emitting industries. The revenue will go to the Climate Adaptation Fund.
Effective Transfer Pricing Law: Submission of master and local documents and country-by-country reporting will be made mandatory for multinational companies. There will be stiff penalties for profit shifting.
Budget process reform
The existing constitutional procedure for budget approval, transparency and accountability will be ensured. Fundamental constitutional and procedural reforms will also be made to strengthen accountability and parliamentary oversight in Bangladesh. A wide range of issues will be covered, including strengthening parliamentary committees, transparency and public participation, and clear guidelines for the pre-election caretaker government.
