I wasn't talking about GDP but rather budgets. Uttar Pradesh budget was INR 1,69,000 crores or Tk 2,70,000 crores in 2011. This year it would be close to Tk 3,00,000 crores. That's some $15 billion dollars more budget for $20 billion dollar larger GDP. That can't be right?
So what? What indian state economy has to do with Bangladesh? Open thread in indian section or we will do so.
back to topic:
Budget will be 17% bigger by borrowing and causing further destruction. Other than Awami League regime propaganda, how that will help Bangladesh economy?
Govt to go for increased borrowings from banks
Siddique Islam
The government is going to increase bank borrowings substantially, to the extent of Tk 294 billion, to finance the budget deficit of the current fiscal year ending June affecting private investment.
"The figure of revised government borrowing from the banking system for FY'12 will be finalised at a meeting of the cash and debt management committee (CDMC) scheduled for Wednesday afternoon," a senior official told the FE.
The Ministry of Finance (MoF) had earlier set the target of borrowing around Tk 279 billion from the country's commercial banks and financial institutions against the original budgetary target of Tk 189.57 billion.
"The government could convince the last mission of International Monetary Fund (IMF) to raise the bank borrowing up to Tk 279 billion for FY'12 exceeding its original budgetary target," said the official who is close to the government's overall borrowing activities.
He also said the central bank has designed its revised monetary programme which was published in its latest monetary policy, considering the government's unofficially revised bank borrowing target for the FY'12.
Now the MoF is planning to borrow Tk 294 billion from the banking system instead of Tk 279 billion to meet the government expenditure.
A high-power committee on cash and debt management headed by the finance secretary is now working on mobilising fund at minimum cost with minimum risk.
The budgetary target for government borrowing from the banking system was originally set at an aggregate level of Tk 189.57 billion through issuing treasury bills (T-bills) and bonds.
Higher subsidy requirements particularly in energy, power and agriculture sectors and lower inflow of fund from the overseas sources have forced the government to borrow more from the country's banking system, said another official while explaining the main reason of higher government borrowing.
He also said higher import of fuel oil has pushed the pressures on subsidy in recent months.
The import of petroleum products increased by 48.61 per cent to $2.68 billion during the July-January period from $1.80 billion during the same period last year, according to the central bank statistics.
"The rising trend of fuel oil imports may continue until next month to meet the increasing demand of oil-based power plants and irrigation purposes," a senior official of the Bangladesh Bank (BB) said.
The government borrowing from banking system increased by nearly four times until March 22 this year compared to the corresponding period of the last year.
The government's net borrowing from banking system shot up to Tk 163.70 billion during the period under review as against Tk 46.49 billion in the same period of the previous year, the BB data showed.
During the period, the government borrowed Tk Tk 109.27 billion from the scheduled banks through issuing treasury bills (T-bills) and bonds during the period while Tk 54.42 billion from the central bank to finance the budget deficit.
Declining trend of net sale of national savings certificates has also forced the government to borrow more from the banking system to meet its budgetary expenditure.
The net investment in the saving certificates came down to Tk 1.14 billion during the July-January period from Tk 22.98 billion in the same period of the previous year.
The government earlier fixed the target to borrow Tk 60 billion through net selling of the savings certificates by the end of FY'12, officials said adding that the net sales witnessed a negative growth in January netting Tk 2.19 billion because of lower rates of return.
The government has raised the rates of return on all existing savings tools to the extent of 2.64 per cent, effective from March 1 to attract savers to the instruments and, thus reduce the government's borrowing from the banking system.
Net receipts of foreign aid during the July-January period of the FY'12 stood lower at $ 530.47 million against $647.10 million in the corresponding period last year.
Govt to go for increased borrowings from banks
