INVESTMENT IN SAVINGS TOOLS
Govt gets Tk 773cr against target of Tk 7,400cr in FY13
The government in the just concluded fiscal year collected only Tk 772.84 crore or 10.44 per cent of the annual target of Tk 7,400 crore in investment in the national savings certificates and bonds.
Officials of the Bangladesh Bank said the government had been forced to go for higher bank borrowing to manage its deficit financing in the FY 2012-13 due to the decreased net investment in the savings tools.
According to the Directorate of National Savings data released on Monday, the savings certificates worth Tk 23,326.77 crore were sold during the FY13. But, in the year the government paid Tk 22,553.93 crore in capital money to the investors. So, the net investment stood at Tk 772.84 crore in the FY13.
The budget for the last fiscal year aimed to borrow Tk 23,000 crore from the banking source, but the target was later raised to Tk 28,500 crore in the revised budget.
A BB official said the government had successfully contained bank borrowing in the first 10 months of the FY13, but it had taken a significant amount of loans between May and June.
He said that the government’s borrowing from the banking sector had increased by 15.45 per cent in the FY13 from that of the previous fiscal year.
The BB data showed that the government’s borrowing from the banking source stood at Tk 24,776.43 crore in the FY 2012-13 against Tk 21,459.03 crore in the FY 2011-12.
The government could have avoid the excess borrowing from the banking sector in the FY13 if it achieved the annual budgetary target of Tk 7,400 crore in investment in savings tools.
A DNS official said the government had failed to attract the clients to the savings bonds and certificates in the last two years.
Due to the dull sales of savings instruments in the period, the government cut drastically the target of investment in its savings instruments for the current fiscal year 2013-14 by 32.82 per cent to Tk 4,971 crore.
The DNS data showed that the government set sales target of savings instruments at Tk 20,000 crore for the FY14, downsizing the target by 29.89 per cent from the FY13 target of Tk 28,529 crore.
The net investment in the savings tools stood only Tk 479.02 crore in the FY12 against an annual budgetary target of Tk 6,000 crore.
The DNS official said, ‘We proposed that the finance ministry withdraw the five per cent tax at source imposed on the savings instruments from this fiscal year. But the finance minister did not accept our proposal.’
In this situation, the DNS sees no hopes of achieving the target set for this fiscal year as clients will not feel encouraged to invest in the savings instruments due to the tax provision, he said.
‘For this reason, the government will be forced to go for higher bank borrowing in this fiscal year like the past two fiscal years,’ he said.
The government has set a bank borrowing target of Tk 25,993 crore for the FY14 while its total volume of its deficit financing is Tk 55,032 crore.
-With New Age input
