The government’s domestic borrowing shot up by 480 percent in the first month of the current fiscal year, even though development expenditure fell.
Domestic borrowing by the government stood at Tk 5,177 crore in July, which was Tk 892 crore a year ago, according to central bank statistics. Of the amount, Tk 4,231 crore came from banks, which was only Tk 431 crore the previous year.
A finance ministry official said the bank borrowing increased because the government issued bonds to three state-owned banks to repay the outstanding loans of Bangladesh Petroleum Corporation.
In the first quarter of fiscal 2013-14, the government paid Tk 2,500 crore to Sonali, Tk 1,800 crore to Janata and Tk 1,600 crore to Agrani, he added.
Meanwhile, a central bank official said the government’s bank borrowing exceeded Tk 9,000 crore by the end of September.
Apart from bank borrowing, the government’s borrowing from savings instrument also doubled year-on-year in the first month of the fiscal year. The government’s net borrowing from savings instruments stood at Tk 945 crore in July, which was Tk 425 crore a year ago.
The sale of savings instruments has been on the decline for the last few years due to higher deposit interest rates, which led to a liquidity glut.
In response, banks recently cut down the deposit interest rate and the government increased the interest rate of savings instruments and the National Board of Revenue removed tax from some instruments, this fiscal year.
The finance ministry official said the National SavingsDirectorate also ran huge publicity campaigns to make savings instruments attractive to public, which actually resulted in a rise in sales and bucked the trend of cashing-in.
While the government’s high-cost domestic borrowing went up, its low-cost foreign borrowing dropped.
The net foreign borrowing by the government in July declined be Tk 325 crore, which increased by Tk 1,282 crore during the same period in fiscal 2012-13.
The government’s revenue income, however, increased during the period. The revenue income growth was 21 percent in July against 11 percent in July last year.
In the first two months of the fiscal year, the annual development programme (ADP) expenditure declined 10 percent year-on-year to Tk 4,081 crore.
Domestic borrowing by the government stood at Tk 5,177 crore in July, which was Tk 892 crore a year ago, according to central bank statistics. Of the amount, Tk 4,231 crore came from banks, which was only Tk 431 crore the previous year.
A finance ministry official said the bank borrowing increased because the government issued bonds to three state-owned banks to repay the outstanding loans of Bangladesh Petroleum Corporation.
In the first quarter of fiscal 2013-14, the government paid Tk 2,500 crore to Sonali, Tk 1,800 crore to Janata and Tk 1,600 crore to Agrani, he added.
Meanwhile, a central bank official said the government’s bank borrowing exceeded Tk 9,000 crore by the end of September.
Apart from bank borrowing, the government’s borrowing from savings instrument also doubled year-on-year in the first month of the fiscal year. The government’s net borrowing from savings instruments stood at Tk 945 crore in July, which was Tk 425 crore a year ago.
The sale of savings instruments has been on the decline for the last few years due to higher deposit interest rates, which led to a liquidity glut.
In response, banks recently cut down the deposit interest rate and the government increased the interest rate of savings instruments and the National Board of Revenue removed tax from some instruments, this fiscal year.
The finance ministry official said the National SavingsDirectorate also ran huge publicity campaigns to make savings instruments attractive to public, which actually resulted in a rise in sales and bucked the trend of cashing-in.
While the government’s high-cost domestic borrowing went up, its low-cost foreign borrowing dropped.
The net foreign borrowing by the government in July declined be Tk 325 crore, which increased by Tk 1,282 crore during the same period in fiscal 2012-13.
The government’s revenue income, however, increased during the period. The revenue income growth was 21 percent in July against 11 percent in July last year.
In the first two months of the fiscal year, the annual development programme (ADP) expenditure declined 10 percent year-on-year to Tk 4,081 crore.
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