The government has borrowed Tk 64,296 crore from banks in the eleven months (July to May) of the 2019-20 fiscal, 37.30 percent more than the last fiscal year.
The bank borrowing target was Tk 47,364 crore in the current fiscal to address the deficit budget.
According to BB data, the deficit in the budget for the fiscal year 2019-20 is Tk 1 lakh 45 thousand 380 crore. To address this deficit, the borrowing target was set at Tk 68,016 crore from foreign sources, Tk 77,363 crore from domestic sources and Tk 47,364 crore from banks.
In addition, sale of savings certificates yielded Tk 27,000 crore for the government which also mobilised Tk 3,000 crore from other sources.
But due to the outbreak of coronavirus in the country last March, the amount of revenue collected from internal sources has decreased. As a result, the government became heavily dependent on bank borrowings to meet the budget deficit and the number of bank loans ballooned.
Due to the current coronavirus crisis, the revenue of the government has slashed on one hand while on the other, government spending has soared. The government has to spend a lot of money on various incentive programmes including relief works and food aid in addition to the regular expenditure of the government.
Coronavirus, in particular, has caused a kind of stagnation in trade and revenue collection. In many cases, duty exemption has been given on imports. Due to these reasons, the government’s dependence on bank loan has roared ahead.