Govt has borrowed heavily from the savings instruments
The government has been able to meet only 5% of the budget deficit in the first four months of the 2017-18 fiscal year, official data show.
This fiscal’s estimated deficit is Tk1,12,276 crores.
Of the amount, Tk5,610 crores are surplus due to low expenditure in the July-October period. During the same period last fiscal, the deficit surplus was Tk1,393.3 crores.
The state borrowed 60.66% of the total estimate in the form of selling saving instruments within four months of the current fiscal.
The latest data show that the sale of National Savings Certificates (NSC) stood at Tk19,500 crores during the July-October period, while the total sale target for the fiscal was Tk32,149 crores.
During the same period last fiscal, sale stood at Tk22,755.07 crores, which was 49.13% higher than the preceding year’s July-October sale.
A Finance Division official involved with the budget implementation process said Bangladesh’s budget expenditure pattern was yet to come out of the “May-June syndrome” as most of the expenditure occurred during the last two months of the fiscal.
“It is not good for budget implementation,” the official noted, pointing out that government agencies did not have the capacity to raise development expenditure, which is above 10% in the first quarter.
About borrowing through saving instruments despite the decreased sale of NSC, the official said that government loans from savings certificates had created a heavy burden on the state exchequer as the interest rate on saving instruments was above 11%.
According to the official, state agencies have not stopped taking loans from saving instruments as it is a kind of an “open tap.”
The government has repaid Tk4,456 crores loan it took from the banking sector in the first four months of this fiscal, according to Office of the Controller General of Accounts.
In the last budget, the government set a target to borrow Tk28,202 crores from the banking system.
CGA data show that the total revenue earning was Tk68,081 crores or 63.88% of the total budget estimate during the four months, which is better than last year’s.
Besides, the National Board of Revenue has collected tax of Tk 57,369 crores during the four months, which is 23.11% of the total amount targeted in the budget.
During the same period last year, the NBR earned Tk41,481 crores. Growth rates of tax and non-tax revenue during this period were 20.06% and -0.34% respectively.
The total government development expenditure stood at Tk1,4190 crores or 9.25% at the end of July-October period this fiscal. Budget estimation of development expenditure is Tk1,53,391 crores.
Acting Finance Secretary Mohammad Muslim Chowdhury said the overall budget implementation in the first four months was good compared to the same period last year.
“We are overhauling the NSC sale system so that it benefits the general buyers more,” he said, adding, “there is no decision to slash savings certificates interest rates.”