THE government’s borrowing from the banking sources suddenly increased in July-September of the current fiscal 2017-18. Officials of Bangladesh Bank disclosed that the government has no other option than to borrow from banks against the backdrop of a surge in its expenditure. They also said that the government has been forced to increase its spending to repair the damaged infrastructures, mainly road and highways, caused by the recent floods across the country.
According to the latest Bangladesh Bank data, the government borrowed Tk 7,565 crore from July 1 to September 5 although it registered a negative borrowing amount of Tk 18,029 crore in the last fiscal year. The government set a target of borrowing Tk 38,938 crore from the banking sources in the Fiscal Year 2016-17 to manage its budget shortage, but it did not make any net borrowing from the banking sources due to a large amount of net sales in government savings certificates and bonds. The government set a target of borrowing Tk 28,203 crore from the banking sources this fiscal year (2017-18).
According to the latest Directorate of National Savings data, the net investment in the savings instruments increased to Tk 5,053.54 crore in July of the Fiscal Year 18 compared to that of Tk 3,498.37 crore in the corresponding month of the Fiscal Year 16-17. Besides, the government continues to maintain a large amount of borrowing from the national savings certificates and bond as the clients are investing heavily in the tools due to the higher interest rate on the instrument compared to the other rates on saving tools prevailing in the market offered by the commercial banks.
The government is now importing huge quantity of rice and wheat to lessen the country’s existing food crisis which also fuelled up its borrowing from the banks, said the BB official. The government is also now implementing its mega projects in line with annual development projects.
The Bangladesh Bank official said that the government borrowing might increase more in the months to come as it would have to continue the import of food grains and implement the ADP.
Besides, the government has by now become habituated to all types of avoidable luxurious expenditures including not so infrequent foreign trips involving huge expenditure from the Tax payers money. So, to keep the funding on, the government is relying on bank-borrowings desperately. These have to be stopped.
Our government is suffering everywhere due to lack of proper planning. We have to change our system if we are to develop into a moderate nation.
