Finance Adviser Salehuddin Ahmed has defended the interim government’s cautious approach in the Tk 7.9 trillion national budget for FY2025-26, countering criticisms from economists that it lacks bold reform and innovation.

“Every new highway begins as a rural path,” Ahmed said on Saturday after the budget was approved by the advisory council. “We’re not serving pulao with ghee. This isn’t a dream budget—it’s about what’s real and achievable.”

The budget, tabled earlier on 2 June, avoids announcing any new large-scale infrastructure projects. Ahmed made it clear that the era of launching megaprojects without delivery discipline was over. “We’re not taking up $12 or $13 billion projects just for show,” he said. Some mid-sized initiatives, including metro extensions and the Bay Terminal, may move forward.

In line with its focus on implementation, the government has cancelled several underperforming projects and aligned the development budget with actual capacity. “We’ve cleaned up the project pipeline,” Ahmed noted.

The final version introduced three significant changes: an additional Tk 10,000 crore allocated to social protection, deferral of the third phase of export subsidy withdrawal until January 2026, and the complete removal of provisions for legalising undisclosed income.

“Not all undisclosed income is illicit, but continuing this scheme had become indefensible,” Ahmed said, acknowledging potential short-term impacts on real estate and similar sectors.

The budget projects 5.5% GDP growth, with inflation expected to fall to 6.5% by June 2026. The fiscal deficit is targeted at 3.6% of GDP, the lowest in over a decade.

Ahmed said the cautious strategy aimed to protect macroeconomic stability as Bangladesh navigates economic transition and external volatility. “We’re very mindful of debt sustainability. Bangladesh has never defaulted on external loans, and we intend to keep it that way.”

He also confirmed $7.4 billion in fresh commitments from multilateral development partners, including $2.3 billion in direct budget support. “This is a sign of confidence in our fiscal management,” he added.

The budget also includes adjustments to civil service incentives and pensions. The minimum monthly special incentive for government employees has been raised to Tk 1,500, while the minimum pension was increased to Tk 750.