In the last fiscal year, 40% of Bangladesh’s revenue income was spent on subsidies, grants, and transfers (SGT), primarily for the power sector. This expenditure growth surpasses the revenue growth, leading to reduced development spending. From FY 2020-21 to FY 2023-24, subsidy expenses increased by BDT 42,900 crore, with BDT 26,100 crore allocated to the power sector. Incentives for agriculture rose by 0.3% of GDP, amounting to BDT 22,000 crore. Interest payments consume 20% of revenue, and salaries account for another 20%, both stable over the years. Other non-development expenses have slightly increased but remain historically low. This trend of rising subsidies and transfers indicates ongoing budget deficits, primarily driven by non-development expenditures, which also impact inflation and economic stability.
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