Govt’s bank borrowing falls in FY2020-21

The government’s bank borrowing de-clined drastically in the just concluded fi scal year, thanks to enhanced revenue earnings and lower level of develop-ment expenditure in FY2020-21.The borrowing was only Tk 26,078 crore in FY2020-2021, down from Tk 82,421 crore in the fi scal year before.Economists said the higher depend-ence on savings instruments helped re-duce dependance on bank borrowing.“The government took massive amount of loan by issuing saving certif-icates that caused the reduction of loan from banking channel. Because of fl awed policy, the government is taking loan from saving certifi cates with higher interest in-stead of low interest bank loan,” Ahsan H Mansur, Executive Director of Policy Re-search Institute, told The Business Post.According to the latest statement of Bangladesh Bank, in FY2020-21, the government borrowed Tk 46,017 crore from banks and paid Tk 19,939 crore, which means the net borrowing of the government stands at Tk 26,078 crore. During the period, the government borrowed Tk 46,017 crore from the com-mercial banks, while it repaid Tk 19,939 crore.Offi cials at the fi nance ministry, however, said the pandemic slowed down the development work of the government in the last fi scal year that caused lower level of borrowing by the government.Besides, they said ballooning bor-rowing from the savings instrument also impacted the yearly borrowing which is much lower than targeted