The government plans to reduce total subsidies by approximately Tk 4,500 crore in the upcoming 2025–26 fiscal year budget, bringing the allocation down from Tk 1.20 lakh crore to around Tk 1.16 lakh crore. However, subsidies for the agriculture sector will not be reduced—instead, they may be increased to meet rising costs and support food security.
The reduction is driven by several factors: outstanding subsidies in the power and energy sectors have been addressed through bond issuance and revised budget allocations, while recent gas price hikes and stable international prices for fuel and fertilizers have decreased subsidy needs in these sectors. Power sector subsidies are still expected to receive around Tk 35,000 crore, while LNG import subsidies may drop from Tk 7,000 crore to Tk 6,000 crore.
Export and remittance incentives will remain unchanged at Tk 14,000 crore, with Tk 7,825 crore for export incentives and Tk 6,200 crore for remittances. An additional Tk 1,200 crore may be allocated specifically for jute and jute product exports. Although long-term plans involve phasing out export incentives post-LDC graduation, the interim government is cautious about making changes that could disrupt trade during current global uncertainties.
Meanwhile, food subsidies are likely to rise to Tk 10,000 crore, up from Tk 7,360 crore, in an effort to curb inflation and support vulnerable populations. The Tk 19,000 crore allocation for the Trading Corporation of Bangladesh (TCB) will remain unchanged.
In agriculture, the sector is poised to receive a Tk 20,000 crore subsidy, up from Tk 17,000 crore in the current fiscal year, largely to cover fertilizer import costs. The Finance Ministry has also committed to adjusting the allocation if international fertilizer prices rise or if the taka depreciates.
Overall, the budget aims to balance fiscal responsibility with targeted support, focusing on stabilizing key sectors while ensuring economic resilience amid evolving global and domestic challenges.
