INVESTMENT IN SAVINGS TOOLS
Govt miles away from annual target
The government is set to miss the annual budgetary target to net in Tk 7,400 crore in investment in national savings certificates and bonds as it collected
only Tk 679.03 crore in the first 10 months of the current fiscal year 2012-13.
BB officials and an economist said that the government would be forced to go for higher bank borrowing to coordinate its deficit financing due to a lower net investment trend in the savings tools.
Officials of the Directorate of National Savings told New Age on Monday that it was almost confirm that the government might miss its annual target of Tk 7,400-crore net investment in the savings certificates for the FY 2012-13 if the ongoing condition continued in the last two months of this fiscal year.
According to DNS data released on Monday, the savings certificates worth Tk 19,581.03 crore were sold during the first 10 months of FY 2012-13. But, in the same period the government paid Tk 18,902 crore in capital money to the investors.
So, the net investment stood at Tk 679.03 crore as of April 31, 2013.
A DNS official said the sales in savings certificates and bonds had increased by 28.76 per cent in the first 10 months of this fiscal year from that of the corresponding period in the FY 2011-12.
But, a huge amount of premature encashment hit the net investment in the savings tools, he said.
The DNS data showed that the sales in savings tools had stood at Tk 19,581,03 crore in July-April of this fiscal year from Tk 15,206.68 crore during the same period of the FY 2011-12.
A BB official said that the decreasing trend in net investment in the savings bonds and certificates would force the government to go for higher borrowing from the banking sector.
The government set a target of borrowing Tk 23,000 crore from the banking system for the FY 2012-13.
The National Board of Revenue has already estimated that it might fail to earn its expected tax revenue of Tk 1,12,259 crore in the FY 2012-13.
The NBR recently estimated that its tax revenue would reach at between Tk 1,08000 to Tk 1,10000 crore in this fiscal year, he said.
Under the circumstances, the government has already revised its target of bank borrowing and estimated at Tk 28,500 crore, he said.
The government borrowing declined significantly in the first 10 months, but the figure has increased this month, he said.
According to the latest BB data, the government borrowed Tk 12,529 crore from the banking source in between July 1 and May 11.
Former interim government adviser AB Mirza Azizul Islam told New Age that the government would have to cut the original allocation at the projects in the FY 2012-13 due to a lower revenue collection and poor net investment in savings tools.
He said that the inflow of foreign aid and grants was now far away from its annual target which created an extra pressure on the government.
‘For these reasons, the government has no scope but higher bank borrowing to manage its deficit financing’, he said.
On the other hand, the higher government borrowing from the banking source would create an adverse impact on the private sector, he said.
The credit growth in the private sector massively dropped in the first nine month of the FY 2012-13 due to complexity between supply side and demand side.
The private sector may face further crisis if the government goes for higher bank borrowing, Mirza Aziz said.
-With New Age input
