Dr. Narayan C. Das on the FY 2024-25 Budget Priorities

DataSense spoke with Dr. Narayan C. Das, Development Economist and Senior Research Fellow at BIGD, BRAC University, to discuss the critical socio-economic challenges and the necessary policy interventions the National Budget for Fiscal Year (FY) 2024-25 must undertake.

His analysis stresses a shift toward sustainable financing, human capital development, and climate resilience to ensure long-term stability and tackle poverty effectively.

Top 3 Challenges and Remedies

Dr. Das identifies three interconnected challenges threatening Bangladesh’s long-term sustainability and immediate living standards.

1. Inflation Control and Cost of Living

While macroeconomic stability is key, ordinary people prioritize keeping the cost of living low, especially food prices. Inflation control requires both demand-side management and targeted supply support.

Policy Action	Rationale
Agricultural Incentives	Reduce inflationary pressure on food items by subsidizing poultry/fish feed and lowering import duties on other essential agricultural inputs. Heavily subsidizing fertilizers must continue to support farm-level production.
Food Security Research	Increase research on flood- and drought-tolerant rice varieties to ensure food security in the face of climate change.

2. Quality of Education and Addressing High Youth Unemployment

Simple increases in funding for infrastructure (e.g., building new colleges) are insufficient. The budget must address the deep-seated quality issues in education that lead to high unemployment among young graduates and skills gaps across key sectors.

Policy Action	Rationale
Targeted Training & Incentives	Expand vocational training for the service sector and offer short-term incentives in potential sectors to create labor demand and facilitate skill transfer, thereby addressing the skilled manpower export gap.
Mitigating Brain Drain	Implement initiatives to reduce brain drain and the reliance on foreign hires in mid-level RMG jobsby cultivating and retaining domestic talent.
R&D Funding	Increase Research and Development (R&D) funding substantially. Innovation, technology, and development cannot happen without research, which is mandatory to prepare the driving forces of youth and women for future economies.

3. Rising Interest Payments and Financial Sustainability

A $1\%$ rise in interest payments on government debt is raising concerns about the long-term financial sustainability of the public sector. This is compounded by a structurally low Tax-to-GDP ratio and inefficient social safety nets.

Policy Action	Rationale
Revenue Generation	Broaden the tax base and improve tax collection efficiency to increase the Tax-to-GDP ratio, thereby reducing reliance on internal borrowing which fuels interest payments.
Project Efficiency	Reduce the duration of completion of development projects to prevent time and cost overruns and improve the efficiency of capital spending.
Gender & Employment	Expand the Care Economy to bring more female workers into formal jobs and reduce the significant gender gap in employment.

Social Safety Nets and Climate Resilience

Dr. Das also emphasizes the need for crucial reforms in social protection and forward-looking climate policy.

Expanding Social Protection

The reach of Bangladesh’s Social Safety Net Programs (SSNP) is still low, reaching only $44\%$ in rural areas and $23.9\%$ in urban areas (HIES 2022 survey).

Inclusion: More than half of people with disabilities are currently excluded from SSNP coverage. The budget must increase the coverage and value of social benefits, which is even more critical given rising commodity prices.
Livelihood Improvement: Investing in livestock development (drawing inspiration from BRAC’s Ultra Poor Graduation Program) and expanding crop and livestock insurance can improve livelihoods and encourage investment in food production.

Addressing Climate Risk

Given the country’s high vulnerability, long-term climate action must be integrated into the budget.

Collaboration: Collaboration between the government and NGOs is necessary to address future climate risks and ensure effective resource deployment, alongside greater international cooperation on climate change initiatives.

This content was originally published in Economic Intelligence Bangladesh’s 3rd Issue.

Post: Dr. Narayan C. Das on the FY 2024-25 Budget Priorities