Govt in difficulty to meet fiscal deficit
Monday, 8 October 2007
Shakhawat Hossain
The caretaker government (CG) is struggling to meet its expenses following lower than expected revenue generation and non-availability of sufficient fund for borrowing from non-banking sources.
With the national board revenue (NBR) falling behind in revenue generation target by some Tk 15.55 billion during July-August period, the government had to rely more on borrowing from both banking and non-banking sources.
But drop in sale of the national savings certificates in the first two months of the current fiscal has become a serious problem for the government in meeting the revenue shortfall, sources said.
The uncomfortable situation has prompted the CG to amend the budgetary measures to encourage the sales of saving certificates, said a senior Ministry of Finance (MoF) official.
The situation has become troublesome following less than expected receipt of foreign aid that stood at US$ 5.86 million in July, 2007 as against $12.24 million in July 2006. The government net borrowing from banking sources stood at Tk 10.81 billion in July 2007 as against Tk 19.80 billion in July 2006.
The NBR has collected Tk 57.53 billion in the first two months of this fiscal as against the target of some Tk 73.08 billion for the same period. The NBR annual target has been fixed at 438.50 billion, the official added.
Available statistics of the MoF showed that the government borrowings through savings certificates in the first two months of current fiscal stood at Tk 5.45 billion compared to that of nearly Tk 10.00 billion during the same period of the last fiscal.
According to the central bank statistics, sales of savings certificates in July 2007 stood lower at Tk 13.55 billion against that of Tk 14.38 billion in July 2006.
The lower sale of savings certificates was mainly due to the imposition of income tax deduction at the rate of 10 per cent at source from interests income from the same, said the MoF official.
However, the CG decided to enhanced the tax exemption ceiling to Tk 1,50,000 from the previous level of Tk 25,000 to encourage the sales of NSD certificates.
The government has been availing itself of non-banking source, mainly the sale of national saving document (NSD) certificates, as its major source of borrowings during the last couple of years.
The caretaker government (CG) is struggling to meet its expenses following lower than expected revenue generation and non-availability of sufficient fund for borrowing from non-banking sources.
With the national board revenue (NBR) falling behind in revenue generation target by some Tk 15.55 billion during July-August period, the government had to rely more on borrowing from both banking and non-banking sources.
But drop in sale of the national savings certificates in the first two months of the current fiscal has become a serious problem for the government in meeting the revenue shortfall, sources said.
The uncomfortable situation has prompted the CG to amend the budgetary measures to encourage the sales of saving certificates, said a senior Ministry of Finance (MoF) official.
The situation has become troublesome following less than expected receipt of foreign aid that stood at US$ 5.86 million in July, 2007 as against $12.24 million in July 2006. The government net borrowing from banking sources stood at Tk 10.81 billion in July 2007 as against Tk 19.80 billion in July 2006.
The NBR has collected Tk 57.53 billion in the first two months of this fiscal as against the target of some Tk 73.08 billion for the same period. The NBR annual target has been fixed at 438.50 billion, the official added.
Available statistics of the MoF showed that the government borrowings through savings certificates in the first two months of current fiscal stood at Tk 5.45 billion compared to that of nearly Tk 10.00 billion during the same period of the last fiscal.
According to the central bank statistics, sales of savings certificates in July 2007 stood lower at Tk 13.55 billion against that of Tk 14.38 billion in July 2006.
The lower sale of savings certificates was mainly due to the imposition of income tax deduction at the rate of 10 per cent at source from interests income from the same, said the MoF official.
However, the CG decided to enhanced the tax exemption ceiling to Tk 1,50,000 from the previous level of Tk 25,000 to encourage the sales of NSD certificates.
The government has been availing itself of non-banking source, mainly the sale of national saving document (NSD) certificates, as its major source of borrowings during the last couple of years.