The Centre for Policy Dialogue (CPD) criticised the proposed national budget for the fiscal year 2025–26, citing lack of alignment with the ideals of an equitable society, particularly in the wake of the July transition.
In a Tuesday press conference titled ‘CPD’s Review of the National Budget 2025–26’, the Dhaka-based think tank raised concerns over existing inequalities, especially in the taxation framework, reports UNB.
CPD Executive Director Fahmida Khatun stated that the proposed budget was expected to be people-centric and focused on holistic national development, rather than merely promoting growth and physical infrastructure.
“However, the budget presented by the finance adviser does not reflect that commitment,” she said.
Referring to the issue of tax-free income, CPD noted that while the limit has been proposed to increase from Tk 3.5 lakh to Tk 3.75 lakh, it will only come into effect in the FY27 and FY28.
Compared to the projected inflation at that time, this relief is ‘insignificant’, CPD noted.
CPD warned that like in previous years, the tax burden will fall heavily on the lower-middle and middle-income groups, especially those earning between Tk 6 lakh and Tk 16 lakh annually.
In contrast, people with annual incomes above Tk 30 lakh will enjoy relatively lower tax rates, a disparity CPD described as a clear sign of inequality.
Describing the 6.5 per cent inflation target set in the budget as ‘ambitious’, Fahmida noted that recent monthly trends suggest the government will struggle to contain inflation within that limit. “Keeping annual inflation at 6.5 per cent will be a challenging task for the government,” she said.
While commenting on revenue projections, CPD Fellow Mustafizur Rahman said achieving the ambitious revenue target will be difficult as the revenue administration remains unreformed. “The government has virtually surrendered to the revenue department in this budget.”
Additionally, CPD noted that while some aspects of the budget — such as the projected growth rate, debt structure, and tax inequality — although anticipated, remain deeply concerning.
Fahmida Khatun strongly criticised the move to allow the whitening of undisclosed money, saying it is ‘unacceptable from a moral standpoint’.
While the interim government has offered the opportunity to legalise black money through investments in the housing sector, it has simultaneously increased duties on various items in that same sector, which will disproportionately affect the middle class, the CPD executive director opined.
Currently, some 20 mega projects are underway, with eight scheduled to be completed by 2026. However, CPD believes that these projects are unlikely to be completed on time and that their costs will escalate, exerting further pressure on the budget’s Annual Development Programme allocations.
On sectoral allocations, Fahmida noted that education has received less than 2 per cent of the total GDP and health less than 1 per cent. “Such allocations cannot lead to meaningful improvements in these vital sectors.”
Regarding social safety nets, CPD stressed the importance of increasing actual allocations for intended beneficiaries, excluding government pension payments and agricultural subsidies, which are currently included under the social safety net umbrella.
CPD said that the proposed budget fails to meet the expectations of building an equitable Bangladesh and called upon the finance adviser to reassess various aspects of the proposal.