Debt servicing will take up 17.56 percent more allocation in the upcoming budget than it did in the current one as the government continues to rely excessively on high-cost domestic borrowing to finance deficits.

Some Tk 35,109 crore has been allocated for interest payment in fiscal 2015-16's budget against Tk 29,865 crore in the current year's one.

The difference between revenue and expenditure in the budget is met through a combination of foreign and internal borrowings.

The rate of interest on foreign borrowing is on average 2 to 3 percent but that on internal borrowing is more than 8 percent.

AB Mirza Azizul Islam, a former adviser of a caretaker government, said though the spending on interest payment has increased, debt service payment is still within the limit. “It should not raise any serious concerns.”

The citizens get a bounty as a result of the government's increased domestic borrowing as a big portion of it comes from savings instrument.

The country has about $19 billion of unused foreign aid in the pipeline and stress should be given on how to use more of that fund, he added.