Education budget in South Asia: where Bangladesh stands?

It is an age of innovation, global interconnectedness, and accelerating advances in technology. It is an age when education can no longer be an indulgence but a necessity on which nations build their futures. Nowhere is this truer than in South Asia, which is home to a quarter of humanity and is bounded by a quarter of the world’s young adults and youth. In poor countries struggling with poverty traps, underdevelopment, and inequality, education is both a moral and a strategic imperative.
Education empowers individuals, strengthens nations, and drives economic growth. It is the strongest tool we have to create a more just and enlightened world. In the act of budgeting every year, however, how priorities are established—or not established—for education reflects the country’s vision for the future. In South Asia, there are significant gaps in education spending, and a fundamental question arises: is Bangladesh falling behind its regional neighbours in education expenditure? This article tries to find the answer

South Asia Budget Patterns: South Asian countries, despite sharing a common colonial history and similar development aspirations, have varying education priority strategies. UNESCO recommends allocating 4 per cent to 6 per cent of gross domestic product (GDP) and 15 per cent to 20 per cent of overall public expenditure to education. Let us compare the three largest South Asian countries.

India’s expenditure on education to GDP is almost 2.9 per cent of GDP and 11.5 per cent of the overall budget in FY 2023–24. It is economically significant but, as a global performer, disappointing. However, in recent years, interventions under the National Education Policy 2020, along with a stronger push for digital learning, have attempted to rectify this.
Sri Lanka’s expenditure is around 1.8 per cent of GDP, but significant increases were observed in budget reformations since 2022 in the IMF engagement framework. Sri Lanka historically under-invests in education but has evidenced a higher priority for vocational and digital training in post-pandemic recovery measures.
Education spending in Pakistan is around 1.7 per cent to 2.0 per cent of GDP which is one of the lowest out-of-school children’s rates in the world, and education spending is desperately low. High defence spending and political instability remain lower-priority areas for education.
Nepal’s budget allocation for education is 10.9 per cent of total expenditure and 4.3 per cent of GDP. The country is closer to UNESCO ratios and has come under widespread praise for consistently investing in education, especially elementary and girls’ education, in the face of ads.
The proportion of income in education expenditure in Bangladesh is around 1.9 per cent of GDP and 11.8 per cent of the national budget. It calls for mention as a dismal fall behind some of its South Asian peers. The country records minuscule annual budgetary increases year after year, demonstrating a disconnect between its strategic efforts in human capital development and spending. This disconnection serves to impede its human capital development drive if no action is taken. Bangladesh lags behind Nepal and India in expenditure as a percentage of GDP, which is the most critical indicator. Although the absolute value of the education budget’s outlay has increased, its ratio as a share of GDP has remained stagnant while recording further structural resistance to spending on human capital.
Is Bangladesh Falling Behind: Being at the crossroads of remaking itself into a knowledge economy, as its then-governing party’s Vision 2041 had envisioned, Bangladesh has a narrow window of time, with its huge youth bulge awaiting a possible demographic dividend. Its window of opportunity is thus short to make a last investment in its education sector at the hub of sustainable economic development, human-driven development, and global competitiveness. However, the country’s persistently low percentage of budgetary allocations for education marred these visions.
Although Bangladesh has made significant progress in access expansion—i.e., approaching almost gender parity and increasing primary schooling enrolment—the quality of schooling, as well as learning outcomes, remains desperately low. World Bank figures show that 58 per cent of Bangladeshi children are unable to read and comprehend a simple sentence by age 10, a runaway learning disaster. Assisting this is the extremely low proportion of public expenditure per student, especially at the secondary and tertiary levels of education, where the pressures of the modern economy bite hardest.
Set against the regional backdrop, the gap is even more acute. For instance, Nepal, having a smaller economy, spends a greater proportion of both public expenditure overall and GDP on education. Nepal has also emphasised equity and access, making significant strides in rural and early childhood education.
Again India, without going over the UNESCO threshold, has already begun the process of transformational change with its National Education Policy (NEP) 2020, such as launching programs such as the National Digital University, which seeks to digitise and universalise quality higher education—something that Bangladesh has yet to do at scale.
While Pakistan can fall behind Bangladesh on implementation and learning gains, the small gap in expenditures indicates that without drastic policy change and extra investment, Bangladesh’s moderate gains can stall or even decline.
Sri Lanka, while spending a marginally lesser proportion of GDP on education, is superior on several measures of quality, such as renewing the curriculum, professional development of staff, and student-teacher ratio, and has a few lessons to impart in terms of making optimal use of resources.
These imbalances reveal a sad reality: Bangladesh is not the poorest performer in spending in the region, but it could be falling short in qualitative education attainment. If it continues to invest incrementally rather than strategically—without resolving structural chokepoints, under-spending areas, and subpar learning outcomes—it risks squandering its demographic dividend and its national development aspirations.
To avoid this, Bangladesh must look beyond mere cosmetic budgetary increases and adopt a comprehensive reform agenda that not only raises spending on education but also makes it more efficient, manages it effectively, and aligns it with the evolving requirements of the 21st-century economy.
Root Causes of Bangladesh’s Lag in Education Financing: Despite the growing realisation of education as the mainstay of national development, Bangladesh continues to contend with deep-rooted structural and administrative problems that adversely affect the effectiveness and adequacy of its education finance. These are not technical problems; they are indicators of more fundamental systemic inaction and governance constraints that must be addressed with the utmost priority and planning.
The most vital of these is the over-centralisation of resource allocation, which results in bottlenecks at both the implementation and planning levels. The room for decision-making remains too centralised at the national level, with little room for schools and local governments to address challenges unique to their areas. The top-down method not only hinders the release of funds but also undermines accountability at the regional level.
More closely akin to this is the decentralisation of the government in the primary, secondary, and tertiary education sectors. In the absence of a centralized, coordinated system, reduplicated responsibilities, redundant efforts, and disjointed policy implementation frequently ensue. As a result, learners have disjointed learning experiences, and resources are not used in the most efficient or valuable manner.
Secondly, inefficiency and corruption also erode public trust and diminish the value of the money invested. Corruption, leakages, and ineffective management systems are widespread in the education sector, Transparency International states, preventing financial inputs from being translated into concrete gains in infrastructure, teacher quality, and learning results.
In addition to these internal pressures, the nation’s traditionally low tax-to-GDP ratio, one of the weakest in the region, limits the government’s overall fiscal capacity. Suppose the base for revenues is not broadened, for instance, through progressive taxation and improved compliance. In that case, Bangladesh will be unable to meet the kinds of long-term commitments to education required to establish a sound, skilled, and internationally competitive labour force.
As the American philosopher John Dewey once astutely remarked, “If we teach today as we taught yesterday, we rob our children of tomorrow.” Similarly, it is with how we finance education. What is needed is a paradigm shift—one that, rather than continuing to think of schooling as an open-ended expense, sees it as a reconstructive investment in human capital. This change must be founded upon decentralized administration, intersectoral coordination, fiscal reform, and, above all, a fresh political will to place education at the forefront of Bangladesh’s development agenda.
Toward a Knowledge-Driven Higher Education Landscape: With the shifting contours of South Asia’s higher education scenario, private universities have been the fulcrum in broadening access, providing choices in fields of study, and spurring innovation. In Bangladesh, the sector has expanded significantly over the past three decades and has received strong patronage for education of burdened public universities. Yet, even though private universities have made valuable contributions to human development capital, research, and foreign collaboration, they are still financially and organisationally limited—principally because of an absence of adequate state support, highly restrictive policy frameworks, and high taxes.
One of the most contentious topics in recent years has been the 15 per cent corporate profit tax imposed on private universities, which hinders their ability to reinvest in academics, faculty development, infrastructure, and, above all, research. Unlike international and regional trends, where private institutions of higher learning are challenged to be innovative and imaginative, in Bangladesh, they are viewed as predominantly commercial ventures rather than developmental partners. Eliminating this 15 per cent tax incidence would represent a paradigm shift in policy, freeing resources for strategic investments in laboratories, libraries, staff salaries, and student scholarships that will further integrate private universities into the national development agenda.
Moreover, part of the government assistance for research at private universities is nonexistent, resulting in an unhealthy imbalance between public and private universities in the production of research. Whereas public universities are supported by research grants funded by the government and overseas donors, private universities, which often employ some of the country’s most prominent scholars, generally have no option but to rely on tuition fees. Public universities take advantage of this entrenched inequity to deprive them of their ability to drive innovation in Bangladesh’s research base, enhance their global academic standing, and forge industry connections.
Comparative Lessons from South Asia: The half-hearted and occasionally doubting approach of Bangladesh towards private universities contrasts with other models of innovation in South Asia.
India, to take one instance, has experienced a renaissance in higher education policy through its National Education Policy (NEP) 2020, which recognizes the role of private universities in bringing about excellence. The Institution of Eminence (IoE) program allows select private institutions to achieve significant autonomy and be eligible to receive public subsidies. Private Indian universities can also tap into competitive research grants offered by government departments, such as the University Grants Commission (UGC) and the Department of Science and Technology (DST), thereby fostering a strong culture of research.
Public-private partnerships (PPPs) have been adopted in Nepal to enable private institutions to access government incentives, research grants, and global academic linkages, especially in the areas of technology and health sciences.
Sri Lanka, with a cautionary-friendly regulatory framework, has gradually opened up foreign and private investment in higher education for innovation and capacity building, especially in areas of STEM and medical studies.
Pakistan, with all its administrative problems, has initiated initiatives like research facilitation by the Higher Education Commission (HEC), in which grants and fellowships are offered to public and private universities with more emphasis placed on research productivity as well as quality assurance.
In the regional context, Bangladesh is likely to lose ground, not due to intellectual inadequacy but rather due to policy slumber and budgetary disincentives. Phasing out support for research and taxing non-profit organizations sends mixed signals about the government’s interest in building a competitive, innovative-based higher education sector.
A Way Forward: To harness the full potential of private universities in Bangladesh, the government will need to shift its policy paradigm from a regulatory to an enabling and collaborative approach. Some of the policy reforms should be as follows: (1) Phasing out the 15 per cent tax on private universities; and (2) Label these institutions as non-profit-making bodies assisting national development rather than taxable enterprises
Moreover, establishing a competitive grants program for public and private universities to promote innovation, local problem-solving, and international cooperation is necessary. Promoting joint courses, faculty exchanges, and research collaborations between private and public universities to break silos and foster knowledge transfer will be beneficial. Encouraging quality through accreditation-based funding is also necessary now. The government provides quality assurance indicators, including accreditation status, research performance, graduate employability, and internationalisation initiatives.
Finally, establishing a higher education innovation council tasked with identification of barriers, recommending change, and enabling strategic investment across the whole higher education system will be helpful.
From Caution to Cooperation: When public universities in a country cannot meet the demand for quality higher education for the growing numbers who want it, then private universities are not a threat —they are an opportunity. They are a reservoir of untapped capacity for research, digitalisation, and international contact. Removing discriminatory taxation and opening up access to government-sponsored research are not budgetary reforms in themselves—they are a commitment that Bangladesh is determined to fulfill, making education a key factor in national advancement. It is now time to move away from regulatory suspicion and towards strategic partnership—for in educating its people lies the true wealth of a country.
Recommendations: To make education a top contributor to national development, Bangladesh must act boldly with evidence-based steps:
Increase the education budget to at least 4% of GDP. It aligns with UNESCO guidelines and global best practices. The growth in budgets must be linked to expanding enrolments and the needs of the labour market.
Enhance spending efficiency. Adopt performance-based financing, enhance digital platforms for monitoring, and prevent leakages through strong governance.
Emphasise early childhood and technical education. Expand coverage of pre-primary and vocational education to prepare for the requirements of the Fourth Industrial Revolution.
Decentralise Educational Administration. Retain budget authority at the local level to better respond to problems of an area-specific nature.
Mobilise private sector and diaspora investment. Leverage public-private partnerships (PPP) and draw on remittance flows to fund community-driven education initiatives.
Revolutionise teacher training and recruitment. Invest in professional development on an ongoing basis and link teacher pay to performance measurements and student achievement.
Embed climate and digital literacy at the heart of the curriculum. Shaping education for future challenges by placing technology and sustainability on the centre stage at all levels.
Conclusion: With South Asia’s vision of becoming an emerging power in the world economy, the strategic value of education cannot be overstated. It is not a cost burden but a transformational investment—a mind-shaping investment that builds institutions and prepares societies to challenge constraints. This is the time for Bangladesh, Dr. Franklin. This is the challenge for Bangladesh, and this is the choice that Bangladesh faces. High are the stakes. The hopes of the nation for democratic stability, technological advancement, and shared prosperity all hinge on the state of its education system. Falling behind on investment in education would not be simply an issue of budgetary deficit would be a quiet surrender of its potential. It would also increase inequality, retard innovation, and forfeit the promise of advancement for millions of young Bangladeshi citizens whose destinies depend on access to good-quality education. The time to act is not tomorrow but today. With every delayed year, it costs a year of missing out on the chance to unleash the potential of the next generation. The issue is no longer how much Bangladesh spends on education—it is how much it can pay not to do it. It stands at a crossroads, and with audacity, shared will, and steadfast policymaking, it can convert this dash with time into a triumph of possibility, justice, and emancipation.

Dr Serajul I Bhuiyan is a professor and former Chairman of the Department of Journalism and Mass Communications, Savannah State University, Savannah, Georgia, USA.
sibhuiyan@yahoo.com