Govt borrowing in last fiscal at three-year low

The government\'s net domestic borrowing came down to a three-year low in 2013-14 fiscal despite a substantial rise in the sale of its savings tools.

A number of economists said higher aid disbursement was the main reason for the decline in the domestic borrowing by the government in the fiscal 2014.

The net domestic borrowing stood at Tk 295.75 billion in the last fiscal year as against the revised target of Tk 409.82 billion, according to cash and debt management (CDMC) wing of the finance division.

The target for the net domestic borrowing was set Tk 339.64 billion in the original budget for the last fiscal.

The government\'s net borrowing (from bank and non bank sources) stood at 325.81 billion in 2012-13, Tk 305.42 billion in 2011-12 and Tk 305.89 billion in 2010-11. It had borrowed at Tk 158.20 billion 2009-10.

CDMC sources said they had postponed the auction of government securities in July last, the first month of the current fiscal year, as they had balances worth Tk 23.32 billion.

However, the government\'s net borrowing from the banking system was Tk 155.57 billion after adjustment with other emergency tools of Ways and Means Advance, Overdraft Current (ODC) and ODC (block).

It had borrowed Tk 100.18 billion (up to May last) through the national saving schemes.

Besides, the government had borrowed Tk. 30 billion from \'others\' sources under the non-bank borrowing in the last fiscal year.

Dr. Zahid Hussain, lead economist at the Dhaka office of the World Bank (WB) said higher aid disbursement is the key reason behind low domestic borrowing.

He said the net aid disbursement during the first eleven months of the last fiscal year stood at US$1.6 billion. It was $1.4 billion during same period of 2012-13.

Dr. Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI) said lower than expected development expenditure is one of the key reasons for borrowing less by the government.

He said the government had failed to implement fully the annual development programme (ADP) projects and those outside it.

The rate of ADP implementation was 95 per cent in the last fiscal.

He said the government had borrowed a sizeable amount through the expensive national saving instruments in the fiscal under review.

The government in its original budget document had a target to borrow Tk 49.71 billion through savings tools in the FY\'14.

But in the revised budget, the government had set a new target at Tk 80 billion.

But, the government\'s net borrowing from the national saving schemes stood at 100.18 billion (upto May last).

The government has set a target of borrowing Tk 432.77 billion from the domestic sources for the current fiscal.