The government did not receive any loan from the sale of national savings certificates in the outgoing fiscal 2024-25. Net sales (investment) were negative by Tk 6,000 crore in the entire year. Rather there was effort throughout the year to redeem loan from savings certificates than to buy them.
Accordingly, the net investment in savings certificates has been negative for three consecutive fiscal years. The net investment in savings certificates is considered as the government's debt and is used to cover the budget deficit. Basically, in the last three fiscal years, the government had to rely on loan from the banking sector other than sale of saving certificates.
Stakeholders say due to high inflation for long time, saving tendency of lower and middle income people decreased. Besides, due to increase in interest rates on deposits and government bills and bonds, a large part of institutional and individual investments were transferred to banks, bills and bonds.
These have affected net investment. However, they expect investment to increase in the current fiscal year due to increase in interest rates and limit on sales free of income tax return.
Every year, the government presents national budget with a large deficit. This deficit is met by borrowing from domestic and foreign sources. Domestic sources include loans from the banking system and the sale of savings certificates.
In the original budget for the 2024-25 fiscal, a target of net borrowing of Tk 15,400 crore was set from the sale of savings certificates. However, as the negative trend in sales continued, it was reduced to Tk 14,000 crore in the revised budget.
According to the National Savings Department, net sale of savings certificates in the last fiscal year (July-June) was negative by Tk 6,063 crore. During this period, the government had to repay more money than it received from the sale of savings certificates.
A senior official of Bangladesh Bank told the Daily Observer that the average income of people has decreased and so small savers are not able to keep the money they were supposed to save. On the other hand, the interest money of the wealthy, who once invested huge in savings certificates have decreased. The net sale of savings certificates has thus negatively affected.
As per information, net investment in savings certificates was negative in 6 months out of 12 months of the last fiscal year.
Of these, negative was Tk 3,225 crore in October, Tk 3,431 crore in November, Tk 3,921 crore in December, Tk 4,769 crore in January, Tk 1,758 crore in February and Tk 169 crore in June. Net investment in savings certificates was however positive in the remaining months.
A review of the information shows net investment in savings certificates was negative in the previous two fiscal years as well. Meanwhile, the net target for sale of savings certificates next fiscal year has been further reduced.
This time, the net target for sale of savings certificates has been set at Tk 12,500 crore; which is Tk 2,900 crore less than the original budget of the last fiscal and Tk 1,500 crore less than the revised budget.
Information shows that in the current fiscal 2024-25, condition for submitting income tax return certificates for purchasing savings certificates up of to Tk 10,000,000 has been relaxed, earlier this limit was Tk 5,000,000.
