Dhaka, 26 January – The interim government of Bangladesh, which assumed office with a stated objective of curbing public expenditure and restoring economic stability, appears to have faced a paradoxical outcome in its early months. Despite announcing austerity measures shortly after taking charge, administrative spending has surged, surpassing total government revenue for the first time in the 2024–25 fiscal year. This fiscal imbalance is now presenting formidable challenges for the incoming administration, as revenue collection continues to lag behind projected targets.
Economists attribute the surge in government expenditure primarily to decisions taken by the interim administration. Notably, the Pay Commission recommended more than a doubling of salaries for public servants under the new pay structure. In addition, lavish initiatives such as luxury flats for ministers and the acquisition of government vehicles have contributed significantly to the fiscal strain. The National Board of Revenue (NBR) reports a shortfall of nearly BDT 46,000 crore against revenue targets in the first six months of the current fiscal year.
A detailed breakdown of key administrative expenditure areas is presented below:
| Expenditure Head | Recent Decisions | Annual Additional Cost (BDT) |
|---|---|---|
| Salaries and Allowances for Civil Servants | Up to 142% increase as per Pay Commission recommendations | 1,06,000 crore |
| Police Risk Allowance | 20% increase across five tiers | 100 crore |
| Village Police Salaries & Retirement Benefits | Salary +1,000, Allowance +20,000 | – |
| Diplomatic Mission Overseas Allowances | 20–33% increase | 35 crore |
| Ministerial Flats Project | Construction of 72 flats | 786 crore |
| Government Vehicles | Three-phase increase in purchase limits | – |
Analysts highlight that retroactive promotions have significantly inflated administrative costs. During the previous Awami League government, approximately 764 officials were promoted from Additional Secretary to Secretary, thereby increasing permanent financial obligations. Additional allowances and the doubling of training stipends have further amplified expenditure.
According to the Ministry of Finance, operational spending for July–September 2025–26 reached BDT 90,597 crore, accounting for 11.47% of the budget, up from 10.23% previously. In the 2024–25 fiscal year, total government revenue amounted to BDT 4,38,571 crore, whereas administrative expenditure stood at BDT 4,74,143 crore – exceeding revenue by BDT 35,572 crore.
Experts warn that without a substantial increase in revenue, such elevated administrative spending could precipitate a serious economic crisis. Former Finance Secretary Mahbub Ahmed remarked, “Managing such expenditure requires sufficient revenue streams. Otherwise, a major financial crisis is inevitable.”
Dr Selim Raihan, Executive Director of private research organisation SANEM, added, “The interim government initially pledged to reduce spending, but its actions resemble those of an electoral administration: administrative costs are rising, while development expenditure is declining – hardly beneficial for public welfare.”
Economists continue to stress that fiscal discipline is crucial for stabilising the economy. They urge the government to rein in administrative expenditure while prioritising development projects and public welfare initiatives.