Bangladesh FY27 budget: Tk9.38 lakh crore plan prioritises inflation relief, job creation

Bangladesh is gearing up for a major economic shift. To tackle lingering inflation, spark new investments, and build a stronger safety net for citizens, the government has officially unveiled a massive Tk9.38 lakh crore national budget for the 2026-27 fiscal year.

Presented to Parliament on Thursday by Finance Minister Amir Khosru Mahmud Chowdhury, this marks the first full-year fiscal roadmap for the BNP government since its return to power. Set to take effect on July 1 (pending parliamentary approval), the budget aims to restore economic stability in an era of global unpredictability.

The Big Picture: Revenue, Deficits, and Debt

The proposed budget accounts for 13.7 per cent of the nation’s gross domestic product (GDP) and is Tk1.48 lakh crore larger than last year’s allocation. However, funding this ambitious plan requires navigating a significant deficit.

Here is how the government plans to balance the books:

Direct Relief for Consumers and Taxpayers

A central theme of FY27 is easing the heavy burden of inflation on household wallets. To achieve this, the government is slashing taxes on the dinner table and expanding tax-free income limits.

The tax-free income threshold will rise from Tk350,000 to Tk375,000 for the next two fiscal years, with plans for further gradual increases through FY31. Women and senior citizens will also enjoy even higher exemption limits.

At the grocery store, consumers will see significant tax and duty reductions on daily essentials like rice, wheat, potatoes, onions, edible oil, pulses, fish, poultry, and dairy. Furthermore, the withholding tax on 60 vital commodities will be slashed to a flat 0.5 per cent, and regulatory duties on spices and imported dates will be completely removed.

Massive Healthcare Reforms

Healthcare is seeing a massive financial injection, with its allocation nearly doubling to Tk69,409 crore. This surge in funding will directly lower the out-of-pocket costs for patients battling chronic illnesses.

The government proposes to completely remove VAT and advance taxes on critical medical supplies, including dialysis filters, blood tubing sets, intraocular lenses, and heart stents. For patients, the real-world impact is substantial: these changes are expected to reduce the cost of a single dialysis session by Tk800 and drop the price of imported heart stents by roughly Tk20,000.

Empowering Agriculture and Ensuring Food Security

To build a climate-resilient and self-reliant food system, the agriculture, food, fisheries, and livestock sectors are receiving a combined Tk43,335 crore—a notable jump from the previous Tk37,126 crore.

This funding will maintain vital fertiliser subsidies, irrigation support, and concessional agricultural credit while heavily expanding modern cold storage and mechanisation. To directly support marginalised and landless farmers, the government will spend Tk1,062.5 crore to roll out 42.5 lakh Farmer Cards across 100 upazilas, providing beneficiaries with Tk2,500 in annual cash assistance and other welfare benefits.

On the food security front, the government is aggressively scaling up its reserves. Grain procurement targets will increase to 41.29 lakh metric tonnes, and storage capacity will expand to 24.50 lakh metric tonnes. The Food-Friendly Programme, which provides subsidised rice to 55 lakh low-income individuals, will continue, with expanded open-market sales at reduced prices.

Tapping into the Blue Economy

Fisheries and livestock are being treated as major strategic growth engines. The government aims to hit a fish production target of 56.35 lakh metric tonnes and propel fisheries export earnings to $1 billion by 2030.

To hit this milestone, the state plans to push into deep-sea fishing, promote seaweed cultivation, and build a modern fishing port at Matarbari. Furthermore, Bangladesh will introduce its first-ever fisheries insurance scheme and expand social protection support to cover 15 lakh fishing households.

The Digital Future: Jobs, Startups, and Tech

Technology and innovation are the cornerstones of the long-term growth strategy. The government wants to supercharge the ICT sector’s contribution to the GDP—pushing it from the current 1-2 per cent up to 10 per cent within five years while creating at least 200,000 new tech jobs annually.

To make digital connectivity cheaper, the longstanding Tk300 tax on SIM cards is being abolished, and the withholding tax on mobile networks will drop from 12 per cent to 10 per cent. Computers, printers, and servers will also see new tax exemptions.

Funding the tech boom includes the following:

• Tk18,115 crore for the Ministry of Science and Technology.

• Tk2,141 crore for Posts and Telecommunications.

• Tk2,049 crore for the ICT Division.

• A Tk500 crore startup fund for young entrepreneurs.

• Tk200 crore for research, innovation, and blue economy initiatives.

• An initial Tk300 crore for the creative economy, backed by an expected Tk500 crore from Bangladesh Bank’s CSR programmes.

Green Energy and Small Business Perks

The budget outlines an aggressive push toward a sustainable future. Solar energy is receiving a massive boost through a zero-tax regime until 2035, paired with direct incentives for consumers who use solar electricity to lower the nation's reliance on fossil fuels.

Electric vehicles (EVs) are also getting cheaper. EV taxes are being significantly cut, and all duties on charging stations and equipment will be withdrawn. Schools utilising electric buses and trucks will be completely exempt from duties until 2030, while local EV manufacturers will receive preferential treatment for raw materials.

For the backbone of the economy—small businesses—enterprises earning up to Tk50 lakh annually will be exempt from turnover taxes. To promote inclusivity, the government raises this threshold to Tk70 lakh for businesses led by women or individuals with disabilities. Startups will also unlock extensive tax benefits to foster innovation.

Sin Taxes and Defense Spending

While essential goods get cheaper, tobacco is getting pricier. Minimum cigarette prices will be raised across all four tiers, and new tax measures are being slapped on nicotine pouches and heated tobacco products.

In terms of national security, the Defence Ministry has been allocated Tk42,497 crore (an increase of Tk1,646 crore from last year) to maintain military readiness and fortify the nation's capabilities.

Navigating Global Headwinds

Despite the domestic optimism, the Finance Minister warned of severe global risks. Economic uncertainty, geopolitical conflicts, shifting trade policies, and supply chain disruptions are now permanent fixtures of the global economy.

A specific concern is the prolonged instability in the Middle East, which threatens overseas employment and remittance inflows. While remittances remain steady for now, manpower exports have already taken a hit, plunging from roughly 95,000 workers in January down to 44,000 in March.

Presenting the document to Parliament, Amir Khosru Mahmud Chowdhury made it clear that this budget is about much more than just balancing spreadsheets.

“Our tax policy is not merely a tool of revenue collection,” the Finance Minister stated. “It is also an instrument of food security, energy security and environmental protection and, above all, an expression of this government’s commitment to a democratic, humane and inclusive economy.”

As Bangladesh steps into FY27, this Tk9.38 lakh crore budget represents a high-stakes balancing act between providing immediate relief to struggling households and financing the country's long-term transformation into a tech-driven, green economy.