The overall budget deficit is set to widen by nearly 12 per cent in Fiscal Year (FY) 2018-19 as the government's expenditures will exceed revenue income.
The deficit is estimated at Tk 1.25 trillion for the next fiscal, up from Tk 1.12 trillion of the original budget estimates of the outgoing fiscal.
The government revised downward its budget deficit to Tk 1.120 trillion from Tk 1.123 trillion for FY'18.
However, the proposed deficit in percentage of gross domestic product (GDP) came down to 4.9 per cent from 5.0 per cent earlier.
The government is set to receive Tk 540.67 billion from the overseas sources.
The remaining Tk 712.26 billion will come from the domestic sources, helping meet the overall budget deficit, according to the budget documents.
Under the proposed arrangement, borrowing from overseas sources will be increased by nearly 8.0 per cent or Tk 35.96 billion during the next fiscal.
The government is set to borrow Tk 500.16 billion from overseas sources.
The remaining Tk 40.51 billion will be received as foreign grants, the documents showed.
The foreign borrowing was projected at Tk 464.20 billion for the outgoing fiscal.
But it was revised to Tk 415.67 billion.
Such borrowing was Tk 116.03 billion in the FY 17.
The government is also set to borrow Tk 420.29 billion from the country's banking system along with Tk 261.97 billion from the sales of savings certificates.
Besides, the remaining Tk 30 billion will be mobilised from non-banking sources as a part of the domestic borrowing.
Under the bank borrowing, the government will borrow Tk 239.65 billion issuing long-term bonds.
And the remaining Tk 180.64 billion will come through treasury bills (T-bills).
The government has already slashed its bank borrowing target to Tk 199.17 billion for the FY 18 from the original target of Tk 282.03 billion, the budget documents showed.
Currently, four T-bills are being transacted through auctions to adjust the government's borrowings from the banking system.
The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
Furthermore, five government bonds, with tenors of two, five, 10, 15 and 20 years respectively, are traded in the market.
On the other hand, the government has increased borrowing target from the sales of savings instruments at Tk 440 billion from the original target of Tk 301.50 billion for the FY 18.
"If we can use the huge external resources in the pipeline, we will be able to largely reduce our dependence on domestic source," finance minister AMA Muhith explained in his budget speech on Thursday.
He also said, "We shall, therefore, persistently make efforts to scale up the use of foreign assistance."
Talking to the FE, a senior official familiar with the government debt management said that the net borrowing from the banking system is still in the negative territory.
The government's net bank borrowing is still at a negative level, amounting to Tk 184.15 billion as on May 30, mainly due to higher growth in the savings certificate sales, according to the central bank's confidential report.
Meanwhile, proposed allocation for the implementation of the Annual Development Programme (ADP) will be Tk 1.73 trillion for the FY' 19 up by Tk 196.69 billion from Tk 1.53 trillion of the original budget estimates for the FY' 18.
Later on, the government revised its ADP allocation to Tk 1.48 trillion from Tk 1.53 trillion.
However, the government is set to pay Tk 2.82 trillion to meet the operating expenditure for the FY 19 against Tk 2.34 trillion of the original budget estimates of this fiscal.
But it was revised to Tk 2.10 trillion for the FY'18.
The government had spent Tk 1.76 trillion for the same purposes in the FY 17, the budget documents showed.
Under the proposed operating expenditures, the government will have to pay Tk 298.10 billion as interest on national savings certificates against Tk 197.92 billion of the original budget estimation.
Later on, such interest payment expenditure was revised to Tk 166.56 billion for the FY 18.
The payment was Tk 142.05 billion in the FY 17.
The government is also set to pay Tk 260.47 billion as pensions and gratuities in the FY'19 against Tk 229.40 billion of the original budget projection for the FY'18.
The payment was revised at Tk 136.86 billion for the outgoing fiscal year.
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