Naima Onamika
Commissioning Editor, The Oniket Bulletin
The proposed national budget for the 2026-27 fiscal year allocates BDT 69,409 crore to the health sector, the highest amount in Bangladesh’s history. This allocation represents 7.4 percent of the total national budget and 1.01 percent of GDP, almost double the revised allocation of the previous fiscal year.
At first glance, this record allocation appears to reflect a significant political commitment to prioritising healthcare. A closer examination, however, reveals several structural weaknesses that could make it difficult to achieve the expected benefits unless effective corrective measures are taken. To understand the significance of this budget, it is important to begin by examining the existing challenges and management shortcomings that continue to affect the health sector.
The Reality of the Block Allocation
The most notable feature of this year’s health budget is the special block allocation of BDT 23,522 crore under the development budget. Since the new government assumed office in February 2026, it did not have sufficient time to prepare and approve projects based on its electoral commitments. As a result, a substantial amount of funding has been reserved as a block allocation rather than being assigned to specific projects.
This approach, however, carries considerable implementation risks. Bangladesh’s health sector has a long history of failing to utilise allocated funds within the designated timeframe. Delays in project approvals, complex procurement procedures, administrative inefficiencies, and weak coordination frequently result in significant amounts of unspent funds each year.
Under such circumstances, setting aside a large amount of money without clearly defined projects may further intensify implementation challenges. If project selection, design, approval, and contract awards are not completed at the beginning of the fiscal year, it becomes extremely difficult to utilise the funds effectively within the remaining period. Experience suggests that the Ministry of Health has often struggled to overcome these challenges.
Neglect of Operational Spending: The Core Challenge of Healthcare Delivery
Development spending is generally used for constructing new hospitals, buildings, and other physical infrastructure. However, the quality of healthcare experienced by citizens is ultimately determined by day-to-day hospital operations, the availability of medicines, the use of medical equipment, adequate staffing, and the overall quality of services. All of these depend primarily on the operational budget. Unfortunately, the current budget does not show any significant increase in operational expenditure. As a result, even if new facilities are built, people may not receive the expected healthcare services unless adequate numbers of doctors, nurses, healthcare workers, medicines, and maintenance resources are made available.
Bangladesh already has numerous healthcare facilities where buildings were constructed through development projects, but service quality failed to meet expectations because of shortages in staffing and operational funding. Maintaining a balance between infrastructure development and operational capacity has therefore become an urgent necessity.
Insufficient Allocation Compared to International Standards
Although allocating 1.01 percent of GDP to health represents a new milestone for Bangladesh, it remains far below international standards. The Health Reform Commission has recommended allocating 5 percent of GDP and 15 percent of the national budget to the health sector. Similarly, the World Health Organization recommends health expenditure equivalent to at least 5 percent of GDP to ensure universal healthcare coverage.
The government has set a target of reaching health expenditure equal to 5 percent of GDP within the next five years. However, the current allocation represents only one fifth of that goal. Sustained increases in long-term investment are therefore essential for meaningful improvements in healthcare services. An even greater concern is that a large share of total healthcare expenditure in Bangladesh continues to come directly from citizens’ own pockets. Out-of-pocket healthcare spending remains the highest in South Asia. As a result, countless families fall into poverty every year due to medical expenses.
Although tax exemptions on cardiac stents, eye lenses, and dialysis filters are positive measures, they are not sufficient to address the fundamental challenges of healthcare financing. What is needed is a strong and sustainable public health financing system.
What Must Be Done to Make the Budget Effective
Several urgent measures are required to transform this record allocation into tangible results. First, the block allocation should be rapidly converted into project-based programmes. Priority should be given to expanding primary healthcare services at the union and ward levels, establishing a national ambulance network, strengthening maternal healthcare programmes, and introducing an effective digital health card system. Second, operational spending must be increased substantially so that newly developed infrastructure can function effectively and deliver quality services.
Third, a modern procurement and supply management centre should be established under the Directorate General of Health Services, alongside a strong monitoring unit within the ministry. Such measures would allow regular reviews of project implementation and enable swift resolution of emerging challenges.
Fourth, transparency and accountability must be ensured in all development expenditures within the health sector. Allegations of corruption and irregularities in previous projects have weakened public confidence. Strict oversight, digital expenditure tracking, and independent auditing mechanisms should therefore be introduced for every stage of spending.
Conclusion
The health budget for the 2026-27 fiscal year presents a significant opportunity to transform Bangladesh’s healthcare sector. However, increasing allocations alone will not bring the desired change. Real success will depend on how efficiently the funds are spent, how quickly projects are implemented, and how effectively healthcare services improve for ordinary citizens.
If this record allocation is wasted because of administrative delays, weak planning, and poor implementation, it will become another missed opportunity. But if the funds are managed through good governance, transparency, and effective administration, Bangladesh’s healthcare sector can achieve a genuinely stronger and more sustainable future.
