The interim government is reorienting social protection spending toward precision labour interventions, with the budget documents for fiscal year 2025-26 revealing Tk 4,171 crore dedicated to 19 employment schemes for high-risk demographics such as the vulnerable and marginalised groups.
This targeted approach — nested within the broader Tk 1,16,731 crore Social Security Programme (SSP) packet — reflects a clear policy shift as the budget share for entrepreneurship support has dramatically increased from 10.76 per cent in FY24 to 21.90 per cent in FY25, and now to 36.83 per cent in FY26.
This trend underscores a move toward self-employment and enterprise development, reports UNB.
Flagship projects like Promoting Gender-Responsive Enterprise Development and TVET Systems (ProGRESS) and the Economic Acceleration and Resilience for NEET (EARN) have been instrumental in this transition, delivering tangible results in youth and women’s economic empowerment.
As a result, economic inclusion programmes which provide training, assets, and credit, now make up 60.84 per cent of labour market expenditures in FY26.
This marks a decline from 74.18 per cent in the current fiscal and an 86.11 per cent in FY24, representing diversification in programme priorities.
Notable entrepreneurship-focused interventions include the Fund for Women Entrepreneurs and the Rural Mother Centre Programme, which have been scaled up to strengthen women’s economic participation and stimulate rural job creation.
Meanwhile, traditional vocational training retains a targeted role, accounting for 3.92 per cent of the FY25 labour programme spending.
Programmes such as the Transforming Backward Youth into Skilled Industrial Workers Project, along with a nationwide Freelancing Training Programme and an expanded Driving Training Programme for overseas jobs, aim to build skill pipelines for both domestic and international markets.
Programmes like the Vulnerable Women Benefit (VWB) and the Rehabilitation Programme for Persons Engaged in Begging reinforce the interim government’s inclusive growth agenda which integrates social protection with employment generation.
Despite these efforts, Bangladesh’s domestic labour market faces continued pressure. Youth unemployment stands at 16.8 per cent, with 30.9 per cent of young people not in education, employment or training (NEET).
Graduate unemployment has also risen, reaching 13.1 per cent in 2023, reflecting a widening gap between skills and market demand.
Manpower exports declined by nearly 30 per cent in 2024, exacerbating domestic employment bottlenecks. In response, initiatives such as the Skills for Employment Investment Program (SEIP) and upcoming training for over 8,41,000 youth aim to address this gap.
The formation of the Labour Reform Commission in April 2025 and ongoing national dialogues signal a renewed push for labour law reform, formalisation of informal work, and expanded social protections.
On June 2, Finance Adviser Salehuddin Ahmed unveiled a Tk 7,90,000 crore national budget for FY26, equivalent to 12.7% of GDP.
This is the 54th national budget and the first under the Yunus-led interim government. Of the total, Tk 5,60,000 crore is allocated for operating expenses and Tk 2,30,000 crore for the Annual Development Programme.