The Crime Desk: The government is taking additional money from the banking sector due to insufficient revenue growth and insufficient borrowing from savings certificates and foreign sources. As of May 21 of the current fiscal year, the government’s net debt stood at about Tk 60,000 crore, which was much lower at the beginning of the year.
According to analysts, the government is forced to take more loans from the banking sector due to low revenue collection, reduced receipts from savings certificates, and reduced foreign loan forgiveness.
As of last January, this debt was only Tk 13,571 crore. Meanwhile, the government’s debt target for the next fiscal year is planned to be reduced by 25 percent to Tk 104,000 crore compared to the original budget estimate. While the debt target in the current fiscal year’s budget was Tk 137,500 crore, it was reduced to Tk 99,000 crore in the revised budget. Bangladesh Bank Governor Dr. Ahsan H. Mansur recently said, ‘In the current situation, the government’s debt will be kept within 90,000 crore taka for the current fiscal year to keep it limited.’
According to Bangladesh Bank data, from the beginning of the current fiscal year to May 21, the government has borrowed 116,210 crore taka from commercial banks. During this period, 56,584 crore taka of old debts have been repaid, resulting in the government’s net debt standing at 59,917 crore taka. In total, the government’s debt in the banking system has reached 534,307 crore taka, which was 474,490 crore taka at the end of last June.
It is known that Bangladesh Bank is repaying its previous liabilities by taking loans from commercial banks to reduce the supply of money in the market and against treasury bills and bonds. As a result, the money of the banks that are in a tight situation is going to the central bank. The central bank has provided 29,410 crore taka to support weak banks during this period. An official of Bangladesh Bank said, ‘It is normal for the government’s debt to increase at the end of the fiscal year, because the activity increases to pay the remaining bills. However, the current government’s debt is much lower than the revised target so far’.
In addition, the current government is following a cost-cutting policy, but the amount of previous outstanding debt and interest payments has increased significantly. In addition, the government’s current expenses are increasing every year, such as salaries and allowances. In the first 9 months of the current fiscal year, revenue increased by only 2.76 percent to Tk 256,487 crore, which is much lower than the target. Again, the government’s debt has increased further due to the reduction in savings certificate loans.
Bangladesh Bank officials said that the target has been set to reduce inflation to 8 percent by June of the current fiscal year, and there is a plan to reduce it to below 6 percent in the next fiscal year. At the end of last April, the average inflation stood at 9.17 percent. If the inflation rate is high, the saving capacity of the common man decreases, which has an impact on the sale of savings certificates and the growth of bank deposits. Last year, the growth of bank deposits was only 7.47 percent.
