Govt raises target of borrowings from savings tools to Tk 32.76b

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S M Jahangir
The government has significantly raised the target of borrowing from savings instruments to Tk 32.76 billion for the current fiscal year to finance its big budget deficit.
The raised borrowing target is up by nearly Tk 4.90 billion or 17.59 per cent from that of the last fiscal, official sources said.
The Ministry of Finance recently finalised the target of borrowings from state-run savings tools - the major internal source of funding, according to the sources.
"Such a significant rise in the target of borrowing from savings tools came primarily due to the government's requirement of additional resources for financing the bigger budget of the current fiscal," an official told the FE.
The total budget deficit in the fiscal year 2009-10 has been estimated at Tk 343.58 billion, which is 5.0 percent of the Gross Domestic Product (GDP). About 2.0 per cent of the deficit will be met from foreign aid and 3.0 per cent from internal resources, official sources said.
Following the increase in borrowing target, the government has also increased the amount of interest to be paid on account of servicing its debts from the savings instruments by nearly Tk 10.67 billion.
According to officials, the government has fixed the target of paying interest against the borrowings from savings tools at Tk 71.53 billion, up from the last fiscal's target of Tk 60.86 billion.
But the government's payment of interest on account of savings instruments eventually hit Tk 70.62 billion at the end of FY 2008-09, official figures showed.
On the other hand, the government has also fixed the target of selling savings instruments to the tune of Tk 167.94 billion for the current fiscal.
However, official sources said the borrowing target set for the current fiscal remains considerably lower than the actual borrowing from the system.
The government borrowed a total of Tk 36.33 billion through its existing savings certificates and investment bonds last fiscal, they mentioned.
They, however, hinted that the borrowing from the system would be much higher than the official target set for the current fiscal.
Of the total target, the government already borrowed a net amount of Tk 9.14 billion in July last.
The government also paid Tk 3.69 billion in interest on account of servicing such internal debt for the same month.