Govt spends Tk 62,560cr on payment of debt interests

The burden of interest on government debt is increasing day by day. Once, less than 30 per cent of the government's operating expenses were spent on paying interest on debts. But in the first six months of the current 2024-25 fiscal year (July-December), the interest rate has exceeded 34 per cent.

During this period, the government spent Tk 62,560 crore on paying interest on domestic and foreign debts, which is about 27 per cent more than the same period of the last fiscal year. Of this, Tk 53,538 crore was spent on paying interest on domestic debt and Tk 9,022 crore on paying interest on foreign debt. In the same period of the last fiscal year, Tk 49,418 crore was spent on interest payment. If this trend continues, about Tk 125,000 crore will be required to pay interest alone at the end of the current fiscal year. The budget has allocated Tk 113,500 crore for this sector.

According to the Finance Ministry, the government will have to pay the highest debt in the current fiscal year. There is a fear that the pressure of debt and interest repayments will intensify in the coming days. On the other hand, the concerned people believe that insufficient revenue collection will make the situation worse. In this situation, they have urged the government to reduce expenditure and increase revenue.

Experts said the interest repayment rate has increased due to the accumulation of debt. The interest repayment rate has increased because the previous government took a lot of loans for mega projects without proper research. Loans were often taken for political considerations without checking the proper feasibility. These loans were not used effectively or efficiently. As a result, there is not enough income from these projects to repay the loans. In the end, it has become a burden.

Development expenditure has decreased in the first six months of the fiscal year. However, due to the additional interest payment expenditure, the overall budget implementation rate has increased slightly from last year to 28.33 per cent. The budget implementation rate in the same period of the last fiscal year and the previous fiscal year was 25.53 and 27.21 per cent, respectively.

Recently, the Finance Department of the Ministry of Finance finalized the budget implementation rate for the first six months of the current fiscal year. According to the statistics of the Finance Department, the size of the main budget of the current fiscal year is Tk 797,000 crore. Against this, the total expenditure in the first six months of the fiscal year was Tk 225,812 crore. The total expenditure in the same period of the last fiscal year was Tk 194,492 crore.

The total operating or non-development expenditure in the first six months of the current fiscal year stood at Tk 186,286 crore. Of this, the highest expenditure was 34 per cent on interest payments. This is followed by 21 per cent on salaries and allowances, 12 per cent on education, 8 per cent on agriculture, 7 per cent on defence, and 6 per cent on public order and safety.

According to the statistics, the size of the Annual Development Programme (ADP) in the main budget of the current fiscal year is Tk  265,000 crore. Against this, the expenditure in the six months was Tk 39,090 crore. Accordingly, the ADP implementation rate during the period under review stood at 14.75 per cent. The ADP expenditure during the same period of the 2023-24 fiscal year was Tk 41,701 crore and the implementation was 15 per cent.