Record bank borrowing by govt in last fiscal

Staff Reporter :
The government borrowed a record Tk 1.24 lakh crore from banks in the just concluded financial year (2022-23) amid a big shortfall in revenue collection and increased public expenditure.
It is the ever highest amount of bank loan taken by the government in a single financial year. The sum was nearly Tk 9,000 crore more than the budgetary target.
Officials said, a higher public expenditure along with big revenue shortfall forced the government to borrow such a gigantic amount from banks.

The National Board of Revenue (NBR) collected Tk 3,25,272 crore in revenues in the just ended fiscal year 2022-23 against an ambitious target of Tk 3.70 lakh crore.
Even though the revenue collection saw around 8.12 per cent growth, it was around Tk 45,000 crore short of the target set by the government, according to NBR sources.
As per the latest information of the central bank, the government borrowed

Tk 1, 24,122.86 crore till June 26, the last working day of the financial year 2022-23. This figure is Tk 8,697 crore more than the revised target of the budget.
In financial year 2022-23, the government had set a bank borrowing target of Tk 1,06,334 crore. But due to reduced sales of savings certificates and lower than expected revenue collection, the target increased to Tk 1,15, 425 crore in the revised budget.
But the government could not manage its expenditure within the target and finally borrowed Tk 8,700 more to meet the additional expenses.

The government took Tk 98,826 crore loan from the central bank and Tk 25,296 crore from commercial banks till June 26 of the last financial year.
Usually, the central bank gives loan to the government by printing money. The government also took loans by issuing treasury bills and bonds with tenures ranging from 91 days to 20 years.
According to the latest information, the debt status of the government in the banking system till June 26 stands at Tk 3,98,435 crore.

Of the sum, Tk 1,58, 820 crore lied with the central bank and Tk 2,39,615 crore in some other commercial banks.
“The expenditure of the government is now more than its revenue earnings. So, it took money from banks to meet the expenses,” Executive director of the Policy Research Institute (PRI) Ahsan H. Mansoor told the New Nation.

He said that the government took the largest amount of loan from Bangladesh Bank, about one lakh crore taka. Even in the last 50 years, the government had not taken such an amount of loan from the central bank. Bangladesh Bank is giving loans to the government by printing money which is in effect fueling the inflation. Average inflation has been above 9 per cent in the last financial year. If this continues, the situation will worsen.