# Foreign loans of Tk 28,281.45 cr paid in the current FY
# Of which Tk 11,601.83 cr has to be paid as interest
In order to initiate mega projects, the government took loans from foreign countries which create pressure to the budget.
However, the government can repay the domestic loan whenever it wants; but there is a fixed time obligation on foreign loans. As the days pass, the government's pressure to repay the loan is increasing.
In the last nine months of the current fiscal year (2023-24), a total of Tk 28,281.45 crore has been repaid, including interest and principal on foreign loans. Of this, the original is Tk 16,679 crore 62 lakh. The remaining Tk 11,601.83 crore had to be paid as interest.
In the budget of the current fiscal year, the government has set a target of repaying a total of Tk 37,076 crore, including the original Tk 24,700 crore of foreign loans and Tk 12,376 crore as interest payment.
This means that the rest of the expenditure of the current fiscal year is not being met with the money allocated for foreign debt liabilities in the budget. For this reason, the government has increased the allocation for interest payment of foreign loans to Tk 15,800 crore in the revised budget for the current fiscal year. In the initial budget of the current fiscal year, Tk 12,376 crore was allocated for foreign loans. In other words, it has been allocated an additional allocation of Tk 3,424 crore in the revised budget.
Economic analysts said that usually in a welfare developing country like Bangladesh, all governments have public commitments. Due to this, the demand for development is also high. Especially in this reality, the major feature of political government in such countries is to try to develop more with less income. As a result, the government borrows from various foreign sources outside the domestic sector to meet the deficit of the budget that it is preparing every year to match the income with additional expenditure to meet the development needs. This is the cumulative size of the debt that the government now has on the shoulders of the country.
In the same period of the last fiscal year 2022-23, the government spent Tk 16,965.66 crore on repayment of foreign loans. Of this, the original was Tk 12,202.16 crore. And the interest had to be paid Tk 4,763 crore 50 lakh. That is, in the financial year 2022-23, where the interest was to be paid at Tk 4,763 crore 50 lakh, till March of the current financial year, the interest has to be paid almost two and a half times.
Meanwhile, the debt of this foreign source is supposed to be repaid from the government's own income; but in reality, the government's income is low. Again, there is less area to increase income. The only hope is revenue. The desired income is not coming from there for various reasons. That is why the government is trying to repay the debt liability by partially repaying the rest of its own income.
Dr Ahsan H Mansur, executive director of Policy Research Institute, a private financial research institute, said the problem is that the government is unable to increase the income from internal sources. Again, a large part of the income is spent on subsidies. this reality, the foreign loan that is coming may have repaid the interest on foreign loans due to some slow implementation of the project. However, this will increase the size of foreign debt, as well as large expenditure in the interest payment sector. The government should enrich the government's treasury by withdrawing the revenue subsidy being given in different sectors in the budget. It will be possible to save at least the huge amount of interest that is being paid in dollars every year.
ZH
