Tk 310.43b allocated for interest payment

The government has allocated Tk 310.43 billion on account of interest payment in the proposed national budget for the financial year (FY) 2014-15, which is 12.4 per cent of the total budgetary allocation.
The allocation is Tk 44.99 billion higher than that of Tk 265.44 billion outlay in the revised national budget of the outgoing FY 2013-14.
Out of the total allocation in the next budget, Tk 293.05 billion will be paid as interest for the domestic loans and Tk 17.38 billion for the foreign loans.
The interests for both the domestic and foreign loans will be provided from the government's revenue income.
Usually, the government borrows from the domestic sources, including banks, non-banking financial institutions and savings certificates; and from the external sources, including multilateral and bilateral lenders, to finance the income-expenditure deficit of the budget.
The overall budget deficit in the upcoming FY' 15 has been projected at Tk 675.52 billion, 5.0 per cent of the Gross Domestic Product (GDP).
Of this amount, Tk 242.75 billion (1.8 per cent of GDP) will be financed from the external sources and Tk 432.77 billion (3.2 per cent of GDP) from the domestic sources.
A total of Tk 312.21 billion (2.3 per cent of GDP) out of the domestic financing will come from the banking system, Tk 90.56 billion (0.67 per cent of GDP) from sale of savings certificates, and Tk 30 billion from other non-banking sources.
Besides, the government has also set aside Tk 96.11 billion for repaying loans and advances (net) in the proposed budget for the next fiscal.
In the revised budget of the outgoing FY 14, the government projected Tk 155.04 billion expenditure for repaying loans and advances.