The interim government has adopted a data-driven labour market strategy aimed at improving employment outcomes for vulnerable and marginalised groups, marking a notable shift in Bangladesh’s social protection priorities.
Though labour market programmes represent a smaller portion of the overall social safety net, recent years have seen significant strategic recalibrations.
According to the proposed budget for FY 2025–26, an allocation of Tk 4,171 crore has been earmarked for 19 labour market programmes, while the broader Social Security Programmes (SSP) received Tk 1,16,731 crore.
The reallocation within labour programmes reflects a clear policy shift. The budget share for entrepreneurship support has increased dramatically—from 10.76% in FY 2023–24 to 21.90% in FY 2024–25, and now to 36.83% in FY 2025–26.
This trend underscores a move towards self-employment and enterprise development, especially for unemployed youth and marginalized populations.
Flagship projects like the Promoting Gender-Responsive Enterprise Development and TVET Systems (ProGRESS) and the Economic Acceleration and Resilience for NEET (EARN) have been instrumental in this transition, delivering tangible results in youth and women’s economic empowerment.
As a result, economic inclusion programmes—which provide training, assets, and credit—now make up 60.84% of labour market expenditures in FY 2025–26.
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This marks a decline from 74.18% in the current fiscal year and 86.11% in FY 2023–24, indicating diversification in programme priorities.
Notable entrepreneurship-focused interventions include the Fund for Women Entrepreneurs and the Rural Mother Centre Programme, which have been scaled up to strengthen women’s economic participation and stimulate rural job creation.
Meanwhile, traditional vocational training retains a targeted role, accounting for 3.92% of labour programme spending in FY 2024–25.
Programmes such as the Transforming Backward Youth into Skilled Industrial Workers Project, along with a nationwide Freelancing Training Programme and an expanded Driving Training Programme for overseas jobs, aim to build skill pipelines for both domestic and international markets.
Programmes like the Vulnerable Women Benefit (VWB) and the Rehabilitation Programme for Persons Engaged in Begging reinforce the government’s inclusive growth agenda, integrating social protection with employment generation.
Despite these efforts, Bangladesh’s domestic labour market faces continued pressure. Youth unemployment stands at 16.8%, with 30.9% of young people not in education, employment or training (NEET).
Graduate unemployment has also risen, reaching 13.1% in 2023, reflecting a widening gap between skills and market demand.
Manpower exports declined by nearly 30% in 2024, exacerbating domestic employment bottlenecks. In response, initiatives such as the Skills for Employment Investment Program (SEIP) and upcoming training for over 841,000 youth aim to address this gap.
The formation of the Labour Reform Commission in April 2025 and ongoing national dialogues signal a renewed push for labour law reform, formalization of informal work, and expanded social protections.
On June 2, Finance Adviser Dr Salehuddin Ahmed unveiled a Tk 7,90,000 crore national budget for FY 2025–26—equivalent to 12.7% of GDP—via a televised address.
This is the 54th national budget and the first under the Dr. Muhammad Yunus-led interim government. Of the total, Tk 5,60,000 crore is allocated for operating expenses, and Tk 2,30,000 crore for the Annual Development Programme (ADP).