Government needs to proceed with caution in terms of financial management
THE fallen Awami League government had borrowed Tk 1.32 trillion from the central bank during its 15 and a half years rule. Due to the dollar crisis, it could not repay the loan on time as per the terms.
At the current foreign exchange rate, the amount of this loan in local currency stands at Tk 7.32 lakh crore. In total, the amount of the old loan is Tk 12.44 lakh crore.
The previous government had borrowed heavily from the central bank using money printed.
This led to an increase in inflation. The present government is having to borrow at high interest rates to repay this old debt. Naturally, this is having an impact on the present government’s financial management.
The state treasury is being strained due to low revenue. Although government spending on development activities has decreased, spending on underdevelopment sector has increased.
As a result, a large portion of debt has gone to the underdevelopment sector, which has led to a decrease in government investment.
In addition, the employment growth rate in this sector has also decreased. According to a report by the central bank, three reasons have been identified for the increase in government debt.
These are low revenue collection and increased expenditure, increased levels of reckless debt repayments taken by the previous government, and the depreciation of the currency due to high inflation.
In reality, the government will have to proceed with caution in terms of financial management. After taking over the office, the government has adopted a policy of austerity.
Since the overall debt is increasing, the government will have to emphasize on revenue collection.
Besides, during the past government’s tenure, a huge amount of money was laundered from the country. Efforts need to be strengthened to bring the money back.
Mentionable, businessmen, bureaucrats and politicians who benefited from the autocrat government had laundered money from Bangladesh and built properties in various countries around the world.
The Central Intelligence Cell of the National Board of Revenue has unearthed assets worth around Tk 40,000 crore after conducting searches in seven cities in five countries from January to August this year.
In addition, 352 passports were found in 9 countries, which were acquired by some Bangladeshis in exchange for money.
We believe that strict steps should be taken to prevent all kinds of irregularities and corruption in the financial sector. Efforts should also be taken to bring back the laundered money.