Govt's bank borrowing up ADP falls far short of implementation target

The government's borrowing from the banking system in the last fiscal
year was 3 percent higher than its target although the
implementation of annual development programme (ADP) is lagging far
behind the target. The revised ADP size was Tk 23 ,000 crore last
fiscal year. In the revised budget for FY 2008-09 the government's
borrowing target was Tk 10 ,698 crore. But finally the government
borrowedz Tk 10 ,964 crore. In the current fiscal year (2009- 10) a
bigger borrowing target has been set at Tk 16 ,755 crore, which is
about 56 percent higher than previous fiscal year's target. Data on
ADP implementation until June has not been available yet. However
ADP implementation was Tk 14 ,088 crore in 11 months until May.
The government would have to spend Tk 8 ,912 crore in one month to
implement the full size of the ADP. In the 11- month period the
government on an average implemented ADP of Tk 1 ,280 crore. So it
is impossible to spend Tk 8 ,912 crore in one month, said planning
ministry officials. The government can at best implement Tk 4 ,000
crore to 5000 crore, they added. Although the government is lagging
behind the ADP implementation target by about Tk 4 ,000 crore, it has
exceeded the borrowing target. Finance ministry officials said
revenue income was lower and foreign assistance might not be
available as per target that increased the borrowing. The National
Board of Revenue's (NBR) target for revenue income was Tk 53 , 000
crore. NBR high officials said they would be able to achieve 99
percent of the target, meaning that there might be Tk 500 crore to
Tk 1 ,000 crore deficit against the revised target. As the
government's borrowing increased, its expenditure on payment of
interest went up. The government's total outstanding domestic
borrowing was Tk 105 ,039 crore until April. This year 19.2 percent
of the revenue budget would be spent on payment of interest. In the
current fiscal year the amount to be spent for interest payment has
been estimated at Tk 15 ,808 crore. Every year, the actual payment
of interest in the revised budget stands higher than the estimated
cost on payment of interest. The estimated expenditure on payment of
interest was Tk 12 ,565 crore last fiscal year, but in the revised
budget the actual expenditure stood at Tk 13 ,314 crore.