|Published : 17 Mar 2017, 00:06:04 | Updated : 19 Mar 2017, 20:04:11|
Budget suffers deficit as public spending soars
Govt manages it by borrowing through national savings tools
The overall budget deficit, including grants, during the July-October period of current fiscal year (FY) stood at Tk 23.52 billion against a surplus of Tk 12.44 billion in the corresponding period of previous fiscal year, mainly due to a rise in government expenditure, according to latest official data.
The total expenditure in the period under review went up by 0.29 percentage point to 3.06 per cent of GDP (gross domestic product).
According to the iBAS database, the total government expenditure increased by 25.03 per cent during the first four months of FY17 than that of the same period of previous fiscal while the annual development programme (ADP) expenditure increased by 26.40 per cent.
The government's current spending on purposes like pay and allowances for the civil servants, goods and services and interest payment rose by over 24 per cent during the period over the same period in the previous fiscal year.
The expenditure on pay and allowances was Tk 33.68 billion and subsidy worth Tk 34.34 billion during the period under review while the interest payment increased by 5.0 per cent to Tk 102.80 billion.
The government made domestic interest payment worth Tk 96.05 billion and external debt servicing payment of Tk 6.75 billion in July-October period of 2016.
However, the expenditure on foods during the period declined to Tk 23.99 billion at the end of October 2016 from Tk 25.85 billion at the end of October 2015.
Non-ADP capital expenditure and net lending had increased by over 75 per cent during the period under review to Tk 32.42 billion.
An analysis of the government showed that the development expenditure was the highest share of spending in physical infrastructure, which is equivalent to nearly 56 per cent, followed by social infrastructure with over 32.0 per cent.
However, the government managed the deficit through non-bank borrowing - borrowing through national saving certificates.
The total borrowing came from non-bank sources during the period stood at Tk 23.54 billion or equivalent to 0.12 per cent of GDP.
The total revenue earnings increased by 17.10 per cent during July-October period of the FY17 than that of the same period of FY16.
The growth rates of tax and non-tax revenue during this period were 19.72 per cent and 3.14 per cent respectively.