The government’s borrowing from the banking system increased by 269.92 per cent in the first three months and nine days of the current financial year compared with that in the same period of FY14.
The government resorted to such increased borrowing from the banking source to pay salaries and festival bonus to its employees on the occasion of Eid-ul-Azha, reports the New Age.
The borrowing from the banks by the government stood at Tk 4,632.25 crore between July 1 and October 9 this financial year against Tk 1,252.20 crore the government borrowed in the same period of the FY14, according to the latest BB data.
The government was compelled to borrow from the banking source in September and the first week of this month as it had to provide a significant amount of money as salary and festival bonus due to Eid-ul-Azha to its employees, a BB official told New Age on Wednesday.
The country celebrated the EId-ul-Azha, one of the two biggest festivals for Muslims, on October 6.
Besides, the revenue collection by National Board of Revenue has maintained a slower pace in the first three months of this year forcing the government to meet its instant needs by taking loans from the banking sector, he said.
He said that the government borrowing might increase significantly in FY15 as it has started the implementation process of the Padma Multipurpose Bridge.
The BB data showed that the government borrowing from the scheduled banks had stood at Tk 7,192.33 crore in the first three months and nine days of the FY15 while it repaid Tk 2,560.08 crore to the central bank pushing down its overall bank borrowing to Tk 4,632.25 crore.
The official said that the recent government borrowing from the banks would not put adverse impact on the country’s private sector as the business people are still maintaining a ‘go-slow policy’ to expand their business due to political uncertainty.
The government borrowing from the banking sector declined by 67.64 per cent in the FY14 compared with that of a rise by 14.50 per cent in the FY13 due to a slower pace in implementation of the government’s development works amid political unrest.
The government’s borrowing from the banking source stood at Tk 7,950.92 crore in the FY14 against Tk 24,570.98 crore in the FY13.
In the 2014-15 fiscal budget, the government aimed to borrow Tk 31,221 crore from the banking source against Tk 29,982 crore in the FY14.
According to the latest central monetary policy for July-December 2014, the BB set the public sector credit growth at 12.9 per cent by December 2014 and 24.8 per cent by June 2015 in line with the government requirement.