Amid domestic economic slowdown due to the scam-hit banking sector, revenue shortfall, high inflation, and the aftermath of war in West Asia, the government is preparing a landmark budget for the upcoming fiscal (2026-27), with a primary focus on establishing a comprehensive ‘Welfare State’, according to officials of the budget section at the Ministry of Finance.
Finance Minister Amir Khosru Mahmud Chowdhury is expected to present a record Tk 9.30 lakh crore budget in the National Parliament on June 11. The proposed fiscal plan shifts from traditional allowance-based aid to an integrated family-centric protection framework, significantly expanding both funding and the number of beneficiaries.
The government plans to increase the number of social safety net beneficiaries to approximately 3.63 crore in the budget of the upcoming fiscal year, up from 2.60 crore in the current fiscal year, FY2025-26. To support this expansion, the allocation is set to jump to Tk 35,708 crore, compared to the current Tk 21,701 crore, said the officials.
The government plans to increase different social safety net coverage in the upcoming budget. Among these:
'Family Card' at the heart of protection: The BNP’s flagship ‘Family Card’ remains the centerpiece of the government's social security strategy. The number of families under this program is slated to rise to 41 lakh.
To prevent duplication, Family Card holders will be ineligible for other individual social allowances, such as old-age or widow benefits.
The government aims to cover 1.61 crore families by FY2029-30, with a projected five-year expenditure of Tk 1.33 lakh crore.
Major Boost for Agriculture and Health Sector:
To secure the rural economy, the ‘Farmer Card’ program will be expanded to cover 42.5 lakh farmers, each receiving an annual cash assistance of Tk 2,500.
In the health sector, the government plans to double the financial assistance for patients suffering from critical illnesses like cancer, kidney disease, and Thalassemia. The grant per patient is expected to increase from Tk 50,000 to Tk 1 lakh for 65,000 beneficiaries.
Reforms in Traditional Allowances:
The monthly benefit will increase from Tk 650 to Tk 700, with the number of beneficiaries rising to 62 lakh. Citizens aged 90 and above will receive a special monthly rate of Tk 1,000.
The monthly Widow Allowance will also rise to Tk 700.
As for the Disability Allowance, coverage will expand to 36 lakh individuals, though the monthly rate remains at Tk 900.
Focus on Religious Institutions and Employment:
In a significant move, the government is massively expanding honorariums for staff at religious institutions (mosques, temples, churches, etc.). The number of beneficiaries—including Imams, Muazzins, and Priests—will soar from 18,000 to over 2.56 lakh, with the budget increasing from Tk 27 crore to Tk 1,081 crore.
Furthermore, to combat inflation-induced food insecurity, the ‘Food-Friendly Program’ will now provide 15 kg of rice at Tk 15 per kg to 60 lakh families.
While the expansion is politically popular and aims to mitigate high inflation, economists warn of severe implementation challenges.
Financing such a massive expansion is difficult given the current revenue shortage. The widening budget deficit, exacerbated by global trade volatility, remains a threat to long-term sustainability.
Experts emphasize that the success of these programs hinges on a transparent, digitalized beneficiary selection process to ensure aid reaches the truly needy.
The 2026-27 budget is expected to serve as a political and economic manifesto, as the first budget of the elected government that followed the July Uprising, and it will attempt to balance the promise of social equity with the harsh realities of a volatile global economy.
According to Dr Jyoti Rahman, who works as a technical expert with the IMF on macroeconomic and fiscal policy issues, there are two time horizons through which the government's "welfarist" policies should be viewed.
“Firstly, the short-to-medium term,” he says. “Since Covid, inflation has eroded the real wages of the working poor and even the middle class. Household savings have declined. And then came the Iran War. But the government can't stimulate the economy through interest rate cuts and megaprojects as in the low interest era of the 2010s anymore.”
That is where welfare payments to households, as long they are fiscally sustainable (that is, paid for by rising revenue), can be a sensible way to support beleaguered households, Rahman contends.
“Secondly, the longer term,” he continues. “The government appears to be philosophically committed to a growth model that is different from the megaproject-driven model of the Hasina regime. The exact details of this model isn't clear yet, but it might be something along the lines of private investment generating employment and income, which generates tax and redistribution.”
Here the key, obviously, will lie in whether the government is capable of implementing this vision.