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It also expects both public and private investment to gradually recover under an elected government.

Meanwhile, the government has begun piloting several electoral commitments, with full-scale implementation planned next fiscal year.

The flagship Family Card programme alone is expected to cost Tk 13,000 crore in its first year, targeting 40 lakh families.

The other promised initiatives will also require large sums, though the finance ministry plans to manage rising demands by consolidating existing social safety net schemes.

The Ninth Pay Commission estimated that an additional Tk 106,000 crore would be required annually to fully implement the new pay structure.

The government is now planning a phased rollout of the Pay Commission’s recommendations, officials said. However, a phased implementation would still demand a substantial outlay. A committee led by the cabinet secretary will draw up proposals on implementation.

A senior finance ministry official, requesting anonymity, told The Daily Star that the revised salary structure will not take effect this fiscal year.

For subsidies, the revised budget earmarked Tk 88,000 crore, but concerned ministries are now seeking additional allocations following the US-Israel war on Iran. As a result, subsidy spending could surpass Tk 100,000 crore.

The government has formed a committee to review the current Annual Development Programme.

Many projects launched by the previous governments will be scrapped, while new ones aligned with the ruling party’s election manifesto will be added.

The ADP size is expected to be set at around Tk 300,000 crore, according to finance ministry officials.

The government will need to allocate additional funds due to its electoral commitments and rising fuel prices, leaving very little room to cut revenue expenditure, said Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue.

“In this circumstance, major initiatives must be taken to boost revenue.”

He stressed the urgency for reforms, particularly modernising the tax system, expanding digitalisation, curbing tax evasion and widening the scope of direct taxes without overburdening ordinary citizens.

On the development side, he urged reprioritisation of spending, including scrapping long-stalled “zombie projects” and exercising caution in approving new ones.

Mustafizur also warned that the budget deficit must be kept within 4 to 5 percent to avoid unsustainable debt pressure, noting that interest payments on domestic and foreign loans have already surpassed education as the largest item in the revenue budget.

Reducing reliance on borrowing, using foreign aid more efficiently, and making the ADP realistic are now critical, he said.

“While cutting expenditure will be difficult, failure to increase revenue flows risks pushing the budget deficit beyond control, and that is the government’s biggest challenge.”