The interim government has allocated Tk36.101 crore for the Local Government Division (LGD) in the budget proposed for FY26.
The proposed allocation for LGD is Tk2,708 crore less than that provided – Tk38,809 crore – in fiscal year 2024-25.
Of the LGD allocation, Tk18,210.25 crore is kept for the Local Government Engineering Department (LGED), which is responsible for construction and maintenance of rural roads, bridges, and development of village growth centres and other infrastructures.   The budget for that department in FY25 was Tk20,112 crore.
Besides, Dhaka North City Corporation is allocated Tk1, 145 crore, Dhaka South City Corporation Tk859.62 crore, and Dhaka WASA Tk3,113.78 crore.  The budget for the city corporations and water supply     will be spent only for development purposes, while the salary and remuneration of employees of the bodies will be paid from their revenue earnings.
In his budget speech, finance adviser Dr Salehuddin Ahmed said, “Services are being provided to the people under the local government system in important areas like development of transport system, birth and death registration, primary health services, environment development, provision of drinking water etc.
“To develop a modern urban system, various short and long-term programmes are being implemented to ensure road infrastructure, safe water supply, development of drainage systems, modern sewerage and primary waste management in different cities.”
He also said, “Besides, the services provided by the city corporations and municipalities are being brought under online-based automation in phases. In addition, to increase transparency and accountability in the works done by the local government institutions, opinions about the overall action plan of LGED are being taken by organizing quarterly stakeholder consultations in every district involving the students and people.”