Abu Sazzad :
The banking sector may be in trouble if government continues its borrowing spree to minimize the upcoming budget deficit for the fiscal year 2015-16, said Economist and Former Adviser to the Caretaker Government Mirza Azizul Islam.
The government deliberately borrowed from the banking sector in the last few years for the said purpose.
The government plans to borrow Tk 38,300 crore from the banking sector with a view
to narrowing the budget deficit for the fiscal 2015-16, a senior Bangladesh Bank Official said.
As on May 11 of the current fiscal, the net borrowing by the government stood at Tk 1,04,042 crore compared with Tk 1,14,243 crore in June 2014, according to the data of Money and Banking Division of Bangladesh Bank.
As per the data, the government borrowed Tk 10, 201 crore during the first nine months (July-January) in the current fiscal.
According to the finance ministry sources, the upcoming budget size will be Tk 2,95,020 crore which is the largest budget in country’s history.
The budget deficit is likely Tk 86,250 crore, source said.
The government will reduce the budget deficit by utilizing internal resources including the sale of saving certificates, bank loan and foreign aid, said the central bank executive Director Mahfuzur Rahman.
The government will collect Tk14, 500 crore from selling of savings instruments, Tk 30,450 crore from foreign sources and Tk 3,000 crore from other resources, foreign ministry source said.
Talking about the government’s big budget, Policy Research Institute (PRI) Executive Director Dr Ahsan H Mansur said, huge investment is needed for sustainable development of the country.
He claimed that government failed to garner adequate fund from internal resources. For this, the government is under duress to take loan from various sectors.
Economist Mamun-Ur- Rahid opined that local interest is very high. On the contrary, interest on foreign loan is comparatively low. So, he suggested for borrowing from foreign sources.
