Reckless borrowing by govt indicates coming disaster
THE government’s net borrowing from the bans stood at Tk 49,106.16 crore in the first seven months of the current fiscal year 2019-2020 resulting in a sharp fall in loan disbursement to the private sector. This type of heavy borrowing would not only collapse the banking system but also hamper industrialisation and employment generation. In particular, poor tax collection by the National Board of Revenue and sharp fall in net sales of National Savings Certificates have forced the government to largely dependent on domestic borrowing. Bangladesh Bank data shows, the government’s outstanding borrowing stood at Tk 1,57,201.86 crore on January 28 this year from Tk 1,08,095.7 crore on June 30 last year. In the budget for the fiscal year 2019-2020, the government had projected borrowing of Tk 47,364 crore from the banking sector. Another five months of the fiscal year is yet to spare and more than 70 per cent of the Annual Development Programme is still remained unimplemented.
On Thursday the Finance Minister told the Parliament that the government between 2009 and 2019 borrowed Tk 13.28 lakh crore from the banking sector and repaid Tk 11.32 lakh crore that made its net bank borrowing Tk 1,95,783.91 crore at the end of December 2019. As a result, the private sector credit growth dropped to 9.83 per cent in December 2019, the lowest since 2008, after witnessing persistent fall through the year 2019. Even, the sales of NSC, another source of borrowing money for the government, also dropped significantly. Meanwhile, the economy is near to collapse as against the skyrocketing cost of constructing major infrastructures and high salary of public servants the revenue collection is insignificant with a negative growth in private sector.
Finance Minister in his own wisdom found the good economy suddenly fell. All the financial institutions in Bangladesh lost control over looters and racketeers. The government must be seen as being the “biggest defaulter”, now it being all-time biggest borrower. When the government is trying to survive on borrowed money from everywhere, then why blame the loan defaulters if they also want to survive on borrowed money from banks?
On Thursday the Finance Minister told the Parliament that the government between 2009 and 2019 borrowed Tk 13.28 lakh crore from the banking sector and repaid Tk 11.32 lakh crore that made its net bank borrowing Tk 1,95,783.91 crore at the end of December 2019. As a result, the private sector credit growth dropped to 9.83 per cent in December 2019, the lowest since 2008, after witnessing persistent fall through the year 2019. Even, the sales of NSC, another source of borrowing money for the government, also dropped significantly. Meanwhile, the economy is near to collapse as against the skyrocketing cost of constructing major infrastructures and high salary of public servants the revenue collection is insignificant with a negative growth in private sector.
Finance Minister in his own wisdom found the good economy suddenly fell. All the financial institutions in Bangladesh lost control over looters and racketeers. The government must be seen as being the “biggest defaulter”, now it being all-time biggest borrower. When the government is trying to survive on borrowed money from everywhere, then why blame the loan defaulters if they also want to survive on borrowed money from banks?
