Govt borrows Tk 13,000 cr in 20 days
Rafiqul Islam Azad: The government has borrowed around Tk 13,000 crore from Bangladesh Bank (BB) within 20 days after the beginning of the new financial year as it is struggling to cover its administrative expenses, according to sources in the central bank.
Economists apprehend that borrowing such amount of money from the central bank may lead to an inflation surge. The government is applying tactics to control inflation on one hand, while on the other hand, it is resorting to printing money to meet its expenses, they observed.
The government has borrowed Tk 4.83 lakh crore till the outgoing financial year. In the previous financial year, the amount of borrowed money was Tk 2.77 lakh crore. Out of this, Tk 1.61 lakh crore was taken from Bangladesh Bank. The government, however, repays some of the borrowings of previous years from the borrowed money, according to Bangladesh Bank sources.
Experts said the country is facing a severe economic crisis due to inflation. The general public has been struggling with soaring prices for nearly two years now. Despite a slight decline in global commodity prices, the people in the country are not benefiting from it due to the surge in the dollar’s value.
The government is facing a fiscal crisis due to the revenue shortfall of nearly Tk 44,000 crore taka in the immediate past financial year. When the government resorts to printing money directly instead of borrowing from other sources to cover expenses, it impacts inflation.
During excessive inflation, continuously printing money from the central bank to meet government expenditures will further exacerbate the inflationary pressure, they noted.
Bankers say that the government has to rely on the central bank since the beginning of the current financial year due to the economic crisis, non-availability of loans from savings certificates, and repayment of previous loans of savings certificates.
Former chief economist of the Dhaka office of the World Bank, Dr. Zahid Hossain, said the government easily takes loans from the central bank, but it is risky. The government’s addiction to borrowing has been persistent over the years, and it remains unchanged in the current fiscal year as well. “Due to the government’s loans, inflation occurs, which adversely affects people’s purchasing power.”
He suggested that the government should cut down on mega projects and non-essential expenses like foreign trips. If not done, it is unlikely that printing money will stop, which will have adverse consequences for Bangladesh Bank and ultimately affect the common people.
Executive Director of the Policy Research Institute (PRI), Dr. Ahsan H. Mansur, said that borrowing money will have a negative impact on the economy.
He said, the government is planning to print around Tk 6 lakh crore during the current fiscal year. To achieve this, they have reduced the loan flow to the government from non-government accounts, which affects controlling inflation. Although temporary control may be achieved, the long-term impact will be even more adverse, he added.
Hasina was mastermind of Pilkhana massacre
India implemented plan Staff Correspondent: There was a domestic and foreign conspiracy be…