Staff Correspondent:

Finance Adviser Dr Salehuddin Ahmed will present the national budget for the 2025-26 fiscal year on television, as the country currently lacks a political government and a functioning parliament, officials say.

According to conventional provisions, finance ministers of political governments present the budget in parliament. As there is no political government in power this year, that will not be possible.

The last time the budget was presented via a televised address was under the 2007-08 caretaker government.

The budget, expected to be around Tk8,50,000 crore, will be announced through a presidential ordinance in early June, before the Eid-ul-Azha holiday.

Finance ministry sources said the upcoming budget would reflect recommendations from the government’s white paper committee on the economy and task force, and would continue subsidies in agriculture, fertilizers and electricity.

The budget speech is expected to be concise, spanning 50-60 pages, and will emphasize a business-friendly tax regime.

With inflation persistently high for over a year, the government aims to reduce it to 7%, while GDP growth may be projected at 5.5%. The budget deficit is expected to remain below 5% of the GDP.

The work on drafting the budget speech has already commenced. Finance Secretary Md Khairuzzaman Mozumder wrote to all secretaries in February, requesting them to submit proposals to incorporate their respective ministries’ “part” in the budget speech.

The letter, sent on February 13, instructs ministries, divisions and agencies to provide details on key policies, laws, plans and reform initiatives implemented in the current fiscal year. It also emphasizes highlighting the achievements of the interim government. Additionally, the finance secretary inquired about secretaries’ strategies for addressing post-LDC graduation challenges.

INFLATION, BUDGET DEFICIT

Sources say that as inflation has remained high for over a year, the government will set a target of reducing inflation to 7% in the upcoming budget.

The deficit for the current fiscal year was set at Tk2,56,000 crore, equivalent to 4.6% of the GDP.

The next fiscal year’s budget deficit is also expected to remain below 5% of the GDP, according to them.

The GDP growth target for FY 2025-26 will be set at 5.5%, while the current fiscal year’s target will be revised downward to 5.25%.

However, the World Bank, IMF and ADB estimate GDP growth for this year to be below 5%.

The upcoming budget is likely to prioritize allocations for health, education, information technology and social security.

REVENUE COLLECTION, ADP EXPENDITURE

During the last six months of the 2024-25 fiscal year, only Tk40,000 crore has been spent under the Annual Development Program (ADP), against an allocation of Tk2,65,000 crore.

Meanwhile, the National Board of Revenue (NBR) collected Tk1,59,015 crore in the first five months, against an annual revenue target of Tk4,80,000 crore.

Notably, to boost revenue collection, the government increased VAT and duties on over 100 products and services in January.

BUDGET SIZE, FUTURE PLANS

The initial budget for the current 2024-25 fiscal year was Tk7,97,000 crore, announced by then-finance minister Abul Hassan Mahmood Ali. However, the government later revised it to around Tk7,50,000 crore.

In contrast, the 2023-24 budget was Tk7,61,785 crore, later reduced to Tk7,14,418 crore.

Finance Secretary Md Khairuzzaman Mozumder said the finance adviser’s budget speech would highlight key government reforms and achievements, adding that this year’s speech would be concise.

Finance Adviser Dr Salehuddin Ahmed told this correspondent that the upcoming budget would be smaller due to various reasons, with no new major projects being introduced.

Ongoing large projects would continue to receive funding, but the ADP size would be reduced, he added.

He said controlling inflation and increasing employment would be major challenges for the 2025-26 budget.

The government aimed to implement a business-friendly tax system while ensuring a realistic budget that laid a foundation for the next administration, avoiding populist measures, Salehuddin mentioned.