Government borrowing from the banking sector has increased by 12.20 per cent during the first two months of Fiscal Year 2021-22 compared to the same period last fiscal year. According to the Bangladesh Bank, government borrowing stood at Tk 1,83,865 crore at the end of August in FY 2020-21.
Besides, the government borrowed Tk 15,710 crore from banks in the first two months of current FY, and covered up loans of Tk 8,191 crore to the central bank.
The net loan for this FY now stands at Tk 7,519 crore which is almost 10 per cent of the government’s target.
The budget for FY2021-22 has a deficit of Tk 2,14,681 crore, which is 6.2 per cent of the total GDP. The government depends on the banking sector to cover its deficits. This fiscal year, the government has planned to borrow Tk 76,452 crore from the banking sector for this purpose.
Government targeted Tk84,980 crore initial budget for that FY, but later dropped to Tk 79,749 crore in the revised budget as the sale of saving certificates had exceeded expectations.
At the end of June 2021, the government’s net loan form savings certificates exceeded Tk 41,959 crore, an increase of 38.47 per cent compared to the target set in that revised budget.
Source: The Business Standard