What Does the National Budget Hold for Women and Children?
Lubaba Mahjabin Prima
More than just an economic declaration, a country’s budget reflects its social commitments, national priorities, and the government’s goal of equitable growth. With Bangladesh being at a critical juncture of its historical and demographical reality, the national budget is crucial in influencing how welfare outcomes develop. This year’s budget presents a mixed picture of its implications for women and children. While it describes some focused programs in areas such as education, health, and social protection, broader macroeconomic trends and fiscal restrictions, such as inflationary pressures and limited development spending, offer substantial obstacles.
The foundation of human capital growth and demographic dividend lies in the education sector, where the budget for Fiscal Year (FY) 2026 increased by only 1 percent, from BDT 94,711 crore in FY 2025 to BDT 95,644 crore. This slow increase does not keep up with inflation and population growth, limiting the expansion of educational services. Furthermore, the budgetary allocation to education as a proportion of GDP fell from 1.69% to 1.53%. This is significantly lower than the eighth Five-Year Plan’s aim of 3.5% percent, as well as the average among least developed countries (LDCs), where over 35 countries spend more than 2% of GDP on education. Between 2016 and 2023, the government spent an average of USD 136 per capita on basic education. Countries like Nicaragua, Honduras, and Mauritania, with lower GDP per capita, spend more per capita on basic education than Bangladesh. This is indeed reflective of the prioritization of the sector. Moreover, several deep rooted problems exist in how education is perceived in the fiscal realm. English medium schools are subject to a 5% VAT and private academic institutions continue to be taxed at 15% corporate tax. This exacerbates the pressures on middle class households and possesses significant challenges to aspects of social mobility and inter-generational welfare.
The health-care sector provides a similarly troubling scenario. While total health expenditure rose from BDT 41,408 crore to BDT 41,908 crore in FY ‘26, the 1% rise is insufficient to address expanding healthcare demands. Significantly, the development element of the health budget fell from 49% in FY ‘25 to 42% in FY ‘26. Non-development spending, which includes wages and recurring expenses, increased by 15%, but this expansion did not help to expand healthcare access or upgrade medical infrastructure. Given the significance of maternal and child health, the reduction in development spending is especially harmful to women and children. International comparisons illustrate the gravity of the situation: in 2022, Bangladesh had the eighth highest out-of-pocket health spending per capita (in PPP terms) among LDCs, accounting for 73% of total health expenditure. This burden has increased over the last two decades, in contrast to regional neighbors such as India, Pakistan, Bhutan, Nepal, and Sri Lanka, which have successfully lowered their residents’ direct health expenditure percentages. Health remains a low priority in Bangladesh’s national budget, with allocations totaling less than 1% of GDP for more than two decades. In 2022, the country had the second lowest health spending among 44 least developed countries (LDCs) and ninth lowest internationally out of 191 countries. Alarmingly, the Urban Primary Health Care Project, which is critical for providing accessible services in densely populated areas, has seen a dramatic budget drop from BDT 180.13 crore last year to only BDT 54.25 crore. This is especially concerning given the density of the country’s sprawling cities, and the huge populations of working class internal migrants living in those. This has ramifications for the women and children, whose health and nutrition are often compromised.
Young women aged 15 to 24 are substantially more likely than men to be Not in Education, Employment or Training (NEET). Although the proportion of NEET among young women aged 15-24 declined from 60.7% to 52.87% between 2016 and 2022 (HIES, 2022), it remains significantly higher than that of young males (12.28% in 2022). 65.5% of NEET youths (15-29) are female, with the remaining 34.5% male. The overrepresentation of young women in NEET may be influenced by cultural expectations and traditional gender roles, which frequently impose a substantial burden on women to provide caring and home responsibilities. The gender gap can also be explained by unequal access to education and skill development, wage disparities, and pressure to prioritize family formation over other pursuits. Instead of alleviating the condition, the current macroeconomic context exacerbates the issue. New job creation is severely limited by a huge drop in investment caused by prolonged political uncertainty. Existing jobs, on the other hand, are at risk as firms grapple with rising operational expenses, decreased consumer demand, and prolonged energy shortages. These issues have resulted in a significant increase in unemployment, with the number of unemployed rising by 70,000 in the fourth quarter of 2024, reaching 2.73 million. While the national female labor force participation rate in Bangladesh is improving, there is concern about diminishing participation in urban areas. This could be due to decreasing intake in the RMG sector and ‘out of work’ following COVID-19. There are also concerns about the lack of institutional service arrangements for the replacement of domestic services in metropolitan areas. On the other hand, the majority of employed women still fall into the “vulnerable employment” category (80.8% in 2022), in sectors and activities with low productivity and profitability. Only 3% of female employees receive employer contributions to their pension or retirement funds. The budget fails to address these issues holistically.
Gender-related appropriations in the national budget have decreased significantly, both in absolute terms and as a percentage of the total budget and GDP. The allocation fell by 4%, from BDT 271,864.9 crore in FY ‘25 to BDT 260,766.6 crore in FY ‘26. As a result, the gender-relevant allocation decreased somewhat as a percentage of the entire budget from 34.11% to 33.01%, and as a part of GDP, from 4.86% to 4.18%. This represents a shift from the previously steady upward trend in gender budget allocations. It is usual for ministries and departments to slash cash allotted for gender budgets while preparing a revised budget. When revising the development budget, it is important to prioritize gender-relevant activities and spend accordingly.
On the policy front, the government extended VAT and SD exemptions on raw materials for sanitary napkins and diapers until 2030, and also implemented a VAT exemption for domestically sold sanitary napkins. However, import duties on period hygiene products remain unchanged, making them prohibitively expensive for many women and girls. Advocates have advocated for full tax relief on all imported raw materials and finished sanitary items, including lowering the total tax incidence on imported sanitary napkins from 127.72% to 31.93%. Several significant gender-focused programs were severely cut in FY ‘26: Enhancing Adaptive Capacity for Coastal Communities, Gender-Responsive Enterprise and TVET, Maternal and Neonatal Child Health, and Promotion of Women Entrepreneurship at the Grassroots Level. In contrast, allocations have increased for the Mother and Child Benefit Programme, Allowance for Widows and Deserted Women, and the overall MCBP scheme. Nonetheless, key efforts such as Tottho Apa and the Her Power Project, both of which attempted to empower women through ICT, have been canceled. These ICT-related projects should be reintroduced, with updated beneficiary lists and a complete, statewide assessment of women’s digital skill requirements.
This budget is notable for its smaller size compared to the previous fiscal year, making it unique in light of Bangladesh’s recent financial patterns. However, to accomplish the Sustainable Development Goals (SDGs) and promote inclusive growth, Bangladesh must take a more integrated and equity-focused approach. This involves raising investment in education and health, restoring crucial stipends, developing progressive tax policies, and establishing gender- and child-responsive budgeting. Only then will the budget be able to function as a transformative tool for social justice and human growth, rather than simply a financial instrument.
Sources:
CPD. (2024, June 7). An Analysis of the National Budget for 2025-26. Post Budget Press Conference, Dhaka. https://cpd.org.bd/resources/2025/06/Presentation-on-CPD-Budget-Analysis-FY2026.pdf
White Paper Committee 2024 (2024). White Paper on State of the Bangladesh Economy Dissection of a Development Narrative. Dhaka: Government of Bangladesh
Author’s Biography:
Lubaba Mahjabin Prima is a young research professional with a background in Development and Environmental Economics. Her work pertains to addressing socio-economic disparities, sustainability challenges, and policy-driven solutions in the Global South.