Bangladesh News

The caretaker government will find out reasons behind anomalous bank borrowing by the immediate past 4-party alliance government during the last few months of its 5-year tenure.
Bangladesh Bank (BB) statistics show that the government borrowed Tk 4,300 crore from banks during the first four months of the current fiscal year (FY) compared to Tk 1,737 crore during the same period of the last FY marking a 147 percent rise.

Of the total, Tk 1,557 crore was borrowed from the Bangladesh Bank and the rest from different commercial banks, according to available data. The BB data also reveals that the past government borrowed Tk 3,386 crore in only the last two months.

“We will investigate the reasons behind the huge bank borrowing by the immediate past government,” Finance and Planning Adviser Dr Akbar Ali Khan told The Daily Star Tuesday, adding that the caretaker government will suspend all the non-priority projects to reduce expenditure.

Khan is suspecting that the revenue collected during Eid might not have been deposited to the government exchequer, which may be another reason for increase in the government’s borrowing.

Finance Ministry sources said the government’s expenditure witnessed a sharp rise at the fag end of its tenure as it approved a number of non-priority projects considering the next election. This raised the government’s dependency on borrowing.

Several ministries were busy signing contracts for development projects for which funds had already been released, sources said, adding that it had led to increase in bank deposits of different autonomous and semi-autonomous bodies of the government. It rose to Tk 10,797 crore at the end of October.

According to the civil society think-tank Centre for Policy Dialogue (CPD), a total of 59 projects amounting to Tk 21,059 crore were approved in seven meetings of the Executive Committee of National Economic Council during the first four months of the current fiscal, which is 80 percent of the fund earmarked for the annual development programme (ADP) of the current fiscal.

The past government also borrowed a higher amount during the last fiscal than the revised borrowing target. It borrowed Tk 5,668 crore against the revised target of Tk 4,911 crore.

Admitting a sharp fall in revenue collection growth, Khan said that he will sit with the officials of National Board of Revenue (NBR) today to discuss the issue.

According to available statistics, revenue collection growth in NBR sector was only 8.9 percent against the target of 20 percent as stated in the budget. On the other hand, revenue collection growth was 15.85 percent during the same period of previous fiscal.

Khan said the caretaker government will try to realise money from the donors to run foreign funded projects. The government has already directed Economic Relations Division to address the issue as soon as possible, he added.