Bigger safety nets, unfinished protection: Assessing Bangladesh’s FY27 social security agenda

The next fiscal year’s social safety net programme marks a visible expansion in ambition, but it also exposes the deeper contradictions of Bangladesh’s social protection system.

The FY2026–27 allocation is presented as a major commitment, both in size and political intent, with new flagship programmes such as the Family Card, Farmer’s Card, expanded allowances, employment support, and digitally delivered cash transfers. This shift matters.

In a period of inflationary pressure, urban vulnerability, climate shocks, and rising inequality, a stronger safety net is not optional. Yet the central question is not only whether the budget has increased, but whether the money will reach the right people, in the right amount, at the right time.

On that test, the programme still has some distance to travel. A major strength of the new social safety net package is its attempt to move away from fragmented, discretionary, and politically mediated welfare delivery.

The emphasis on proxy means test (PMT)-based targeting,a statistical method used by governments and NGOs to identify the poorest households for social assistance, government-to-person (G2P) electronic cash payments, female-headed household registration under the Family Card, and the Dynamic Social Registry-a continuously updated database linked with national identity systems-suggests a more modern and evidence-based approach.

These reforms could reduce leakage, double-dipping, and local patronage if implemented properly. But that is a large “if”.

Bangladesh has had a long history of well-designed reform language being weakened at the implementation stage. A registry is only as good as the data behind it.

PMT scores can exclude many genuinely poor households if income, assets, migration, climate shocks, or informal work are poorly captured. Without community validation, grievance redress, and regular updating, the system may simply replace old errors with more technically sophisticated errors.

Benefit adequacy remains another serious concern. Raising some allowances and introducing Tk 2,500 per month under the Family Card is a welcome step, especially when directed to women in poor households.

Still, the real value of benefits must be judged against food prices, rent, health expenses, education costs, and debt burdens. A fixed transfer can quickly lose meaning when inflation remains high.

The proposed consumer price index (CPI)-linked annual review, which automatically adjusts monetary allocations based on inflation data to maintain purchasing power, is therefore sensible, but it must become an enforceable budget practice rather than a statement of intent.

The programme also remains heavily tilted towards social assistance, while social insurance for informal workers is still largely absent. This is a structural weakness. A country where most workers are informal cannot build a resilient social protection system only through tax-financed allowances and ad hoc transfers.

The broader concern is that the next fiscal year’s social safety net appears more expansive than transformative. It recognises many of the right problems: fragmentation, targeting errors, urban gaps, ageing, climate vulnerability, and weak linkage with employment. But the proposed solution still depends heavily on administrative reform within a system that remains spread across many ministries and programmes.

For the safety net to become a genuine pathway out of poverty, transfers for working-age households need to be linked more credibly with skills, childcare, health services, agricultural productivity, employment, and local economic opportunities. At the same time, elderly people, persons with disabilities, widows, and those unable to work need reliable and dignified income support.

The next fiscal year’s programme is therefore a useful step, but not yet a decisive break from the old model. Its success will depend less on the announcement of new cards and more on targeting integrity, benefit adequacy, fiscal protection, and the political willingness to make social protection a right rather than a favour.

The writer is a professor of economics at Dhaka University and executive director of South Asian Network on Economic Modeling.