CPD urges structural reforms across sectors

Think tank calls for evidence-based policymaking in govt's first 180 days

FE REPORT | Published: February 28, 2026 23:35:55

With a new government taking office, the Centre for Policy Dialogue (CPD) has urged policymakers to use the first 180 days to set a different tone -- one grounded in evidence, transparency and meaningful parliamentary oversight.
The think tank argues that reforms across the power, trade, revenue and investment sectors can no longer be delayed if Bangladesh is to stabilise its economy and build public confidence.
Presenting its study at its Dhanmondi office on Saturday, CPD researchers cautioned that rising fiscal pressure, opaque decision-making and weak institutional accountability are not abstract risks.
These could directly affect jobs, prices and investor confidence at a critical moment in the country's transition and its graduation from Least Developed Country (LDC) status, they said.
In essence, CPD's message to the BNP-led administration is straightforward: strong electoral mandates must translate into careful, data-driven decisions and accountable governance, particularly in sectors that shape the everyday economic realities of citizens.
CPD Research Director Dr Khondaker Golam Moazzem warned that fiscal stress, policy opacity and weak institutional accountability threaten to derail the country's post-election economic transition and its graduation from Least Developed Country (LDC) status.
In its paper titled "New Government's Priorities in Addressing Socio-economic Challenges: Introducing Knowledge-based Decision Making in the Executive and Legislative Process", CPD identified the power and energy sector as a critical reform area.
The think tank recommended an immediate moratorium on new fossil fuel-based power projects, arguing that official master plans projecting electricity demand of 40-50 gigawatts (GW) by 2040 are significantly overstated.
Independent assessments suggest actual demand may be closer to 30GW, it said.
According to CPD, inflated GDP-linked projections rather than real industrial consumption data have driven aggressive expansion, risking long-term surplus capacity and mounting capacity payments to independent power producers (IPPs).
Despite tariffs rising to Tk 8.95 per unit in 2024, fiscal pressure persists, partly due to rigid "take-or-pay" agreements.
The organisation proposed inserting "no electricity, no pay" clauses in future power purchase agreements and renegotiating existing contracts where feasible.
It also called for strengthened oversight by the Parliamentary Standing Committee on Power and Energy, alongside greater transparency in decisions taken by the Bangladesh Power Development Board (BPDB) and the Bangladesh Energy Regulatory Commission (BERC).
CPD further cautioned against deepening dependence on imported LNG and coal, highlighting a daily gas shortfall of around 1,200 million cubic feet.
It urged prioritisation of domestic gas exploration and expanded regional power trade with Nepal and Bhutan to support renewable energy integration.
Although the interim administration approved a Renewable Energy Policy 2025, CPD observed that grid absorption for variable renewables remains capped at 20 per cent and smart grid deployment has been deferred to 2040-50.
It proposed a grid stress test by Power Grid Bangladesh and the creation of an Independent System Operator to separate grid management from generation interests.
Turning to fiscal policy, CPD noted that Bangladesh's tax-to-GDP ratio has declined to approximately 6.8 per cent, the lowest in South Asia.
While the government aims to raise the ratio to 10 per cent in the medium term and 15 per cent by 2035, CPD warned that revenue mobilisation will falter without addressing leakages and regressive structures.
The study recommended consolidating the existing eight VAT slabs into a three-tier system, phasing out exemptions for non-essential services and removing preferential tax treatment for fossil fuel-based power producers.
It also advocated mandatory digital tax returns, a 30-45 day digital dispute resolution mechanism and performance-linked corporate tax incentives.
On the business environment, CPD cited transport bottlenecks, unreliable utilities, regulatory complexity and corruption as persistent constraints.
Despite partial digitalisation initiatives such as BanglaBiz and the Single Window system, backend integration remains incomplete.
The think tank called for API-based integration across regulatory bodies and the appointment of tax and banking ombudsmen to strengthen accountability.
CPD also urged the government to withdraw from the recently signed "Agreement on Reciprocal Trade" with the United States, describing it as discriminatory and potentially harmful to Bangladesh's trade sovereignty.
The agreement reportedly requires phased tariff elimination on US-origin goods while allowing reciprocal duties on Bangladeshi exports.
CPD claimed the deal would prevent Bangladesh from imposing digital service taxes on US firms or customs duties on electronic transmissions, and could restrict trade arrangements with third countries that do not align with US standards.
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