Govt's bank borrowings rise on slowing revenue
Government's bank borrowings have marked a 16 percent rise in about nine months of this fiscal year on the back of a slump in revenue collections, compared to the same period a year earlier.
The central bank data shows that such borrowings reached Tk 7,398 crore in the period from July to March 8. The amount was Tk 6,393 crore in the same period last year.
The government targeted a Tk 13,500 crore loans from banks this fiscal year.
A Bangladesh Bank report sent to the parliamentary standing committee on the finance ministry feared this would impact credit flows to the private sector.
"In this situation, revenue income should be raised, cautionary attitude towards subsidies be adopted, and if necessary, initiative should be taken to collect money from foreign sources," the report suggested.
It also pointed to the liquidity pressures banks now feel and said the central bank has to extend repo support to the lending banks to cope with it.
The BB report also alerted the government of the possible low profit this time from its overseas foreign currency investments because of the ongoing global financial meltdown.
Meanwhile, the National Board of Revenue showed a Tk 2,500 crore shortfall in the revenue collection target during January-February.
The revenue officials attributed such a shortfall to less import duties and value-added taxes.
At import level, revenue collection growth was 8.69 percent in eight months of the current fiscal year. However, the February growth was 7.90 percent lower than in the same month a year earlier.
Revenues grew 11.84 percent to Tk 30,527 crore in a span of eight months until February against the Tk 54,500 crore target for fiscal 2008-09.
The growth was 26 percent in the same period a year earlier. The government set a 16 percent growth target for this fiscal year.
Recently, Finance Minister AMA Muhith expressed his fear that the government might run a Tk 400 crore short of the revenue collection target. “If the rate of deficiency continues until the end of the fiscal year the shortfall might cross Tk 3,000 crore,” said an official of the ministry.
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