A Tk 3.0-trillion Annual Development Programme (ADP) for the next fiscal year is getting final consideration today with several-fold increases in education and health allocations with the focus on human-capital development, officials say.
However, the highest development-budget sanction goes for the fund-guzzling Local Government Division and the Road Transport and Highways Division.
The proposed ADP, which is 50-percent higher than the revised Annual Development Programme (RADP) of Tk 2.0 trillion for the outgoing fiscal year, is set to be placed at today's extended meeting of the Planning Commission.
Planning Minister Amir Khasru Mahmud Chowdhury is scheduled preside over the meet. Sources say Zonayed Abdur Rahim Saki, State Minister for Planning, S M Shakil Akhter and other senior officials of the ministry will attend the meeting.
Subject to approval at the meeting, the final ADP proposal will be placed before the National Economic Council (NEC) at a meeting scheduled for next week, the sources add.
They say Tk 1.9 trillion, equivalent to 63.33 per cent of the total outlay, is set to be financed from the government exchequer while the remaining Tk 1.1 trillion is expected to be managed from external sources, mainly in the form of project loans and grants.
For the current fiscal year, the government had initially approved an ADP of Tk 2.3 trillion, which was later revised down to Tk 2.0 trillion, comprising Tk 1.28 trillion from domestic resources and Tk 0.72 trillion from external financing.
The proposed allocation for the next fiscal year represents an increase of 48.44 per cent in domestic financing and 52.78 per cent in external financing.
In the proposed ADP for the next fiscal year, the Local Government Division (LGD) is set to receive the highest allocation of Tk 366.20 billion, followed by the Road Transport and Highways Division (RTHD) with Tk 329.03 billion.
Health Services Division is likely to see a significant leap in allocation to Tk 206.08 billion, more than six folds compared to its revised allocation of Tk 31.28 billion in the current fiscal, elevating its position to third from the 15th.
Among other sectors, Primary and Mass Education is set to receive Tk 213.48 billion, 2.65-fold higher than the revised allocation of the current fiscal year at Tk 80.54 billion.
The Secondary and Higher Education Division is likely to get Tk 208.35 billion, 3.37-fold higher than the current revised allocation of Tk 61.90 billion.
Power Division is expected to receive the fourth-highest allocation at Tk 192.85 billion, followed by the Ministry of Science and Technology with Tk 173.66 billion.
In a significant move toward long-term economic resilience, the government is set to boost human-capital development by increasing budgetary allocations for education and health in the upcoming budget for the FY2026-27, officials say.
According to preliminary estimates from the Ministry of Finance (MoF), the government plans to raise education spending to 2.0 per cent of GDP or gross domestic product and health-sector allocation to 1.0 per cent of GDP.
Officials say this shift signals a departure from Bangladesh's historical trend of social-sector neglect as the country prepares for its post-LDC-graduation challenges.
For decades, health and education have remained underfunded, with education spending stubbornly staying below 2.0-percent mark and health receiving less than 1.0 per cent of the GDP.
In the current FY2025-26 national budget, the allocation for education is Tk 956.44 billion, which accounts for 1.53 per cent of the GDP, while for health Tk 419.08 billion, or 0.67 per cent of the GDP.
Experts have long argued that these figures fall far short of the UNESCO recommendation of 4.0-6.0 per cent for education and the 5.0-percent target often cited for a functional healthcare system.
A senior MoF official says, "We have decided to enhance the budgetary allocation in the educational and health sectors for building a better human capital to weather the impact of the LDC graduation as well as build the country."
He adds: "We have to boost our economy into a trillion-dollar one, and that's why the human-resources development is a top priority of the government."
The government is going to allocate extended funds in the development budget for the health and education sectors so that the country could reap benefit from the quality development of its human capital, the ministry official says.
Dr Rashel Mahmud Al Titumir, Advisor to the Prime Minister, at a discussion meeting Thursday said their government would increase the budgetary allocation to 5.0 per cent of GDP in the field of health and education.
Another MoF official told the FE that the proposed hike is part of a broader "investment-driven model" intended to build a technology-driven, employment-oriented workforce.
The targeted allocation at 2.0 per cent of GDP will be to improve primary education quality and expand vocational training along with the tertiary and higher education in Bangladesh.
"Finance secretary has recently instructed the health and education ministries and other implementing agencies who are involved with human-capital development to spend money for quality development," the MoF official adds.
Fund-allocation target of 1.0 per cent of GDP in the upcoming national budget would mainly be utilized to strengthen preventive healthcare and reduce out-of-pocket expenses, which currently account for over 70 per cent of total health costs.
The overall national budget for FY2026-27 is expected to be Tk 9.30 trillion.
The finance official says while infrastructure remains a priority, the focus is shifting toward "people over physical structures" to ensure sustainable 6.2-percent GDP growth in the medium term.
While the planned increases are a welcome step, economists from the Centre for Policy Dialogue (CPD) caution that the narrow tax-to-GDP ratio-currently around 6.8 per cent-remains a major barrier to realizing these ambitions.
"Increasing the allocation is only half the battle," says a senior researcher at the CPD. "The real challenge lies in improving the implementation capacity of the ministries, which often struggle to fully utilize even their current modest budgets."
The government is expected to officially table the budget proposal in the Jatiya Sangsad early next month, where further details on sectoral reforms and funding sources will be rolled out.
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