The government has borrowed more than Tk7,000 crore from banking sector in the first quarter this fiscal year to clear a backlog of development projects cheques of last fiscal year, officials at the Finance Division said.
As traditionally happens, the cheques pile up unpaid during last two months of a fiscal year and are carried over to the following year, which is known as May-June syndrome. An official said there was a rise in misuse of development funds last year.
In the first quarter of last fiscal year, the government had repaid Tk2,471 crore loans to banks.
According to the Finance Division, during the July-September period, the budget surplus amounted to Tk1,153 crore though there was supposed to be a deficit in the three months. During the period of last fiscal year, there was a budget deficit of Tk1,737 crore.
In the first quarter, only 6.7% of the total Annual Development Project (ADP) allocation was spent, which is the lowest in four years.
This fiscal year, the budget deficit is estimated to be Tk86,657 crore, which is 5% of the country’s gross domestic product. The deficit is to be met by borrowing from foreign and local sources.
But in the first three months, the government spent only Tk37,105 crore, which is 12.58% of the total budget allocation of Tk2,95,100 crore. The government was, however, supposed to spend Tk38,258 crore in the period.
During the same period last year, it spent Tk36,523 crore, which was 14.6% of total allocation.
In the first quarter this fiscal, the total revenue collection was Tk38,278 crore, which is 18.4% of the target. A year earlier, it was Tk34,785 crore.
“The government should have to look into the matter how the loans from the banking system would be used,” said AB Mirza Azizul Islam, finance adviser to a caretaker government.
He said if the May-June syndrome hits the implementation of development projects, it will cast a negative impact on the progress of works.
Mirza Azizul Islam sees the government borrowing from the country’s banking sector “a good thing” as the banks have huge amounts of idle money.
