The government's borrowing from both foreign and domestic sources is set to increase by more than 15 per cent in the next fiscal year to meet budget deficit.
The proposed budget has earmarked Tk 2.11 trillion from external and domestic sources against the revised target of Tk 1.83 trillion in the current fiscal.
Of the total, Tk 1.13 trillion has been proposed to be available from domestic sources while Tk 977.38 billion is expected to borrow from overseas sources.
Out of the total domestic borrowing target, Tk 764.52 billion has been proposed from the banking system and Tk 370.01 billion from non-bank sources.
Bank borrowing for FY 2022 will be 4.0-plus per cent less than the revised target of Tk 797.49 billion for FY 2021, according to the proposed budget documents.
As proposed, the government will borrow Tk 516 billion through long-term Bangladesh Government Treasury Bonds, generally known as bonds, and the remaining Tk 248.52 billion through treasury bills (T-bills).
It has already slashed bank borrowing target to Tk 797.49 billion for FY 2021 from the original target of Tk 849.80 billion, compelled by lower execution of the annual development programme amid Covid-19.
Currently, four T-bills are being transacted through auctions to adjust the government's borrowing from the banking system.
The T-bills have 14-day, 91-day, 182-day and 364-day maturity periods.
Furthermore, five government bonds, with tenures of two, five, 10, 15 and 20 years respectively, are traded on the market.
On the other hand, the government projected higher borrowing target from non-banking sources, particularly from national savings schemes, at Tk 370.01 billion to meet budget deficit partly for next fiscal.
It is set to borrow through selling savings tools Tk 320 billion in FY22 from Tk 303.02 billion in the FY21 revised budget, according to the proposed budget.
The original target of such borrowing was Tk 200 billion for the outgoing fiscal year.
