COVID-19 fallout: Govt set to borrow huge in three fiscal years

The government has planned to borrow Tk 5714.5 billion from various sources from home and abroad over the next three fiscal years, including the running one, mainly to face the economic challenges posed by the novel coronavirus pandemic that has stalled economic activities globally.

According to a government document obtained by news agency UNB, the COVID-19 will cast a huge impact on revenue earnings.

Besides, the document says, the government will have to spend an additional amount of money on emergency health services and stimulus packages, which will lead to an increased size of budget deficit on mid-term basis.

That is why, the document mentions, the government has taken this initiative in its mid-term plan.

As per the plan, the government will borrow Tk 1900 billion in the current 2020-21 fiscal, while Tk 1791.7 billion in 2021-22 fiscal and Tk 2022.8 billion in 2022-23 fiscal.

The government will take Tk 888.2 billion as foreign loan in 2020-21 fiscal, while the amount will be Tk 860 billion and Tk 971 billion in 2021-22 and 2022-23 fiscal years respectively.

In these three fiscal years, 2020-21, 2021-22 and 2022-23, the government will get foreign grant of Tk 40.1 billion, Tk 43 billion and Tk 54.8 billion respectively.

From internal sources, the government will take a loan of Tk 1099.8 billion in the current fiscal year while Tk 1032 billion in the next year and Tk 1167 billion in the 2022-23 fiscal.

In 2020-21 fiscal, the banking sector will provide Tk 849.8 billion, while the non-banking sector Tk 250 billion, national savings certificates Tk 200 billion and Tk 50 billion will come from other sectors.

The banking sector will provide Tk 802 billion, while non-banking sector Tk 230 billion and national savings certificates Tk 200 billion in 2021-22 fiscal year. Besides, Tk 30 billion will come from other sectors during the period.

In the 2022-23 fiscal year, Tk 947 billion will come from the banking sector, while Tk 220 billion from non-banking sector, Tk 200 billion from national savings certificates and Tk 20 billion from other sectors.

Finance minister AHM Mustafa Kamal, in his post-budget press conference, mentioned that this budget was for protecting the people of the country and the government will manage the required money for that.

He also said the government will spend the money first and earn the money later to save the people of the country from the fallout of COVID-19 pandemic.

According to the document, the revenue collection in the last five years were on the right track, but there will be an adverse impact on revenue collection in the coming days due to the pandemic.

It also said the government is looking for more sources for financing the implementation of the announced Tk 1.03 trillion stimulus packages. The World Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank and the Japan International Cooperation Association (JICA) have already made positive responses.

The government hopes that Bangladesh will be able to get additional assistance of USD 2 billion in 2020-21 fiscal year. With this, the total amount of the stipulated money will stand at Tk 1900 billion.

But the document states that financing from internal sources would be the main ones to cover the deficit during the mid-term period.

It also says the Bangladesh Bank has taken expansionary monetary policy and started its implementation, which is expected to give the economy a big boost.