Presentation Paper Policy Brief
In the first half of FY25, Bangladesh’s revenue mobilisation grew by 4.4 per cent, significantly lagging behind the ambitious annual growth target of 32.2 per cent. This sluggish pace underscores a critical shortfall in the country’s fiscal strategy, highlighting the challenges faced by the interim government amidst a challenging macroeconomic environment. With a steep 55.5 per cent growth required in the remainder of FY25 to meet targets, the prospects appear grim, projecting a potential revenue shortfall that could deeply impact Bangladesh’s economic stability.
The above-mentioned observations emerged at a media briefing titled ‘Recommendations for the National Budget FY2025-26’ on Sunday, 16 March 2025, organised by the Centre for Policy Dialogue (CPD) under its flagship programme Independent Review of Bangladesh Development (IRBD).
While addressing the macroeconomic stability issues, Dr Fahmida Khatun, Executive Director of CPD, emphasised the need for a pragmatic fiscal framework. She stated, ‘We must consider the current economic realities to stabilise and strengthen our economy effectively’.
She highlighted the urgent need for reform within the National Board of Revenue (NBR) to enhance efficiency and compliance, advocating for broad-based tax reforms that focus on enhancing tax collection and administration.
Dr Khatun extended her recommendations to specific fiscal policies across various sectors. For the health sector, she called for increased budget allocation to prevent high out-of-pocket spending, which exacerbates poverty.
Regarding education, she recommended fiscal measures to support improved funding, particularly targeting the underprivileged to enhance access and quality. She also emphasised the importance of supporting small and medium enterprises, crucial for economic diversification and employment, and suggested restructuring the energy sector’s financial strategy to address persistent fiscal deficits and promote sustainable energy practices.
Additionally, Dr Khatun urged the integration of environmental sustainability into fiscal policies, recommending incentives for green technologies and penalising pollutants to foster a greener economy.
Professor Mustafizur Rahman, Distinguished Fellow, CPD, recommended enhancing food stocks and expanding the importer base to stabilise market prices and ensure food security, particularly as we approach the Boro season. Additionally, broadening initiatives like the family card programme is crucial to address immediate food needs and prepare for our upcoming graduation from LDC status.
An open-floor Q&A session with journalists from both print and electronic media followed the discussion.