Sales of savings tools set to be double the target

Busness Desk :
Net sales of national saving certificates have already crossed this fiscal year’s target and are now set to be double the annual target.
The shrinking bank interest rate on deposits is driving the savers to the government’s savings instruments – at a time when people are struggling to earn enough to pay for basic needs such as food and housing due to the coronavirus pandemic.  
In the July-March period of the 2020-21 fiscal year, the net sales of savings instruments surpassed Tk33,000 crore, while the annual target has been set at Tk20,000 crore.  
The net sales in March stood around Tk4,000 crore, while the sales figure in February was more than Tk3,500 crore.
If the upswing continues, economic experts think savings instruments sales will surpass Tk40,000 crore in the last three months of the 2020-21 FY.
Towfiqul Islam Khan, senior research fellow of the Centre for Policy Dialogue (CPD), thinks the sales might be more than Tk40,000 crore at the end of the fiscal year.  
“Many invest in the savings certificates usually in the fourth quarter of a fiscal year, considering getting benefitted by tax exemptions. So, the sales will be doubled at the end of the fiscal year than the target,” he noted.
To meet the budget deficit, the government borrows from banks and against the savings tools as internal sources. With pandemic-led sluggish budget implementation, there is less spending pressure, resulting in the government’s shrinking outstanding bank borrowing.
At the end of the previous FY, the government’s outstanding bank borrowing was around Tk1.77 lakh crore. In the first ten months of the current FY, outstanding bank borrowing has dropped by Tk13,626 crore to around Tk1.64 lakh crore.
This means the government did not have to borrow from banks till April of the current year, rather it has repaid the loans taken earlier.
The sales of savings certificates are increasing although the government’s borrowing from local sources has reduced.