INVESTMENT IN SAVINGS TOOLS
Govt certain to miss out on annual target
The government is set to miss the annual budgetary target of Tk 7,400 crore in investment in the national savings certificates and bonds as it collected only Tk 735.19 crore in
the first 11 months of the current fiscal year.
BB officials said that the government was forced to go for higher bank borrowing to coordinate its deficit financing this financial year due to a lower net investment in the savings tools.
Officials of the Directorate of National Savings told New Age on Thursday that it was almost sure that the government would miss its annual target of investment in the savings certificates for the FY 2012-13 with only one month remaining of the fiscal year.
According to the DNS data released on Thursday, the savings certificates worth Tk 21,384.59 crore were sold during the first 11 months of the FY 2012-13. But, in the same period the government paid Tk 20,649.40 crore in capital money to the investors.
So, the net investment stood at Tk 735.19 crore as of May 31, 2013.
The current fiscal year budget 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 this financial year, but it had to borrow a significant amount of loans between May and June.
He said that the government’s borrowing might increase significantly in the remaining days in June — the last month of this fiscal year.
The government is now trying to complete its budgetary pledges by taking loans from the banks, he said.
He said the government’s borrowing from the banking source could have decreased if the government was able to increase the sales of the saving instruments in the period.
Due to dull sales of savings instruments in the last two years, the government drastically cut investment target from its savings instruments for the upcoming 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 FY 2013-14, downsizing by 29.89 per cent from the FY 2012-13 target of Tk 28,529 crore.
A DNS official said the government failed to attract the clients to the savings bonds and certificates in the last two years.
The government raised the rate of interest on the savings instruments in the period, but its effort virtually failed, he said.
He said, ‘We have proposed the finance ministry to withdraw the five per cent tax at source on the savings instruments from the upcoming fiscal year. But the finance minister did not announce such withdrawal in his budget speech for the FY 2013-14 in the parliament.’
Under the circumstances, the DNS does not see any hope to attain the new target set for the upcoming fiscal year as clients will not feel encouraged in investing in the savings instruments due to the existing tax at source, he said.
-With New Age input
