The ousted Awami League government has run the country for most of the time with money printed from the central bank at a reckless speed. The Awami League government was more dependent on the central bank for loans than any government since Bangladesh’s independence. In 15 and a half years from January 1, 2009 to July 31, 2024, the ousted government took a loan of Tk 1 lakh 32 thousand 228 thousand crores.
There are allegations of looting of money printed in the name of development projects. This has increased the flow of money in the market. In contrast, production did not increase. As a result, the rate of inflation has increased, which has particularly crushed low-income people. made economic management fragile.
According to sources, Awami League came to power in January 2009. Since then the party was in power for 15 years and 7 months. At that time, the government embezzled people’s money and smuggled it abroad through the implementation of various projects and bank robbery. Government ministers, members of parliament and other close people have embezzled money and smuggled it. This includes people’s deposits in banks as well as loans taken from the central bank in money printed.
Former Prime Minister Sheikh Hasina was forced to resign and leave the country in the face of intense student movement on August 5. As a result, the long-term power of the Awami League government ended. But the economic chaos is now more pronounced, which the new government has to deal with.
In this context, former President of Bangladesh Economic Association and former teacher of Chittagong University Economics Department, Prof. Moinul Islam said that the wounds of the outgoing government taking excessive loans from the central bank are still present everywhere in the economy. It is very easy to borrow from printed money.
But the responsibility for this is many, which falls on the people. Due to money printing, the rate of inflation has contributed to increase. Printed money was the same if it was used in the manufacturing sector; But they have been used in larger projects. There have also been incidents of money laundering in these projects. As a result, the flow of money has increased on the one hand, and on the other hand, it has been smuggled. This increased the dollar crisis. The depth of the wound has also been revealed.
According to the data obtained from a research report of the Central Bank, since independence till December 2008, the loan status taken from Bangladesh Bank in taka printed was Tk 25 thousand 109 crores. Various governments have taken these loans since independence.
Awami League government came to power in January 2009. From then on they are in power. On August 5, the Awami League government was forced to resign in the face of intense agitation by the students. As such, the loans taken by the government from the central bank from January 2009 to last August 4 are identified as loans taken by the Awami League government. As of July 31, the government’s borrowing status from the central bank has increased to Tk 1,57,337,200,000.
According to this, the Awami League government alone has taken a loan of Tk 1 lakh 32 thousand 228 crore 20 lakh from the central bank in the last 15 and a half years. The growth of domestic production or GDP has also increased during the period under discussion. However, the debt from the money printed by the central bank has increased excessively. At that time, the tendency of the government to borrow from the central bank increased by 5.27 times. Besides, bank loans and foreign loans also increased.
However, before the Ershad government assumed power in 1982, the debt status of printed money was very low. Ershad’s government printed money and became more dependent on the central bank to run the government. In 1991, even during the tenure of the BNP government, the debt status of printed money did not increase much. After 1996, the Awami League government increased its reliance on bank loans to meet budget deficits.
At that time, for the first time, the target of borrowing from the banking system was announced in the budget. Then former finance minister Shah ASM Kibria came under severe criticism. No government had set such a target before. Since then, the bank loan target has been announced every year to meet the budget deficit. But no government has announced any target for borrowing money from the central bank so far.
But the government is recklessly taking loans from the central bank by overprinting money. Out of this, the outgoing government took the most debt. The Awami League government came under severe criticism for excessive loans from the central bank. Still did not stop taking loans. Some years have taken more loans. Some years have paid off previous loans without taking new loans. But on average the loan is more.
Of these, the maximum loan was taken from July 2022 to June 2023. At that time, the government took a loan of 97 thousand 684 crores from the central bank. This was the highest borrowing. Governments have had to borrow record amounts from central banks as the global recession has increased spending and reduced revenues. Besides, at that time banks also faced liquidity crisis due to dollar crisis. Because of that, he could not take more loans from the bank. As a result, the debt status at that time increased to 1 lakh 57 thousand 640 crores.
The second highest loan was taken at the time of Corono’s infection. From July 2020 to June 2021, the borrowing was Tk 31 thousand 404 crore and the third highest loan was taken from July 2021 to July 2022 at Tk 31 thousand 324 crore. Basically, because the revenue income was low in those three years, the government took more loans from the central bank. In those three years, the government has taken a loan of Tk 160 thousand 412 crores from the central bank, which is more than the current status. Due to repayment of some loans, the loan status has decreased.
As a result of excessive borrowing from the Central Bank, the rate of inflation increased from 2021 onwards. Inflation in June of that year was 5.64 percent. Inflation rose to 11.66 percent last July. Low-income people in particular have been hit harder by rising inflation rates. On the one hand, their income has decreased, on the contrary, their expenses have increased. Besides, the pressure on economic management has increased.
In the face of intense criticism, the government paid off the earlier debt in the 2023-24 financial year without taking a loan from the central bank. In that year, the government repaid only 6,457 crores of the previous loans. This has reduced the debt status somewhat. But last July again took a loan of 1 thousand 289 crores from the central bank. The status has increased slightly. Has taken loans since the beginning of August. Apart from this, 7 commercial banks weakened by looting have been lent with money printed by the central bank. These also came into the market and increased the flow of money. As a result, the rate of inflation increased.
Earlier in the beginning of this government, the tendency of the government to take loans from the central bank was less. As of June 2010, the debt status has increased to Tk 21 thousand 793 crore. That is, in the first year and a half, the government did not take any loan from the central bank. Instead, 3 thousand 316 crore rupees were paid from the previous loan. In June 2011, the debt status increased again to 31 thousand 358 crores. In that year, the government took a new loan of Tk 9,565 crore. In June 2012, the debt status further increased to 37 thousand 312 crores. 5 thousand 954 crores of new loans were taken from the central bank in that year also.
In June 2013, the debt status decreased slightly to Tk 30 thousand 467 crores. In that year, the government did not take any new loan from the central bank but repaid the previous loan of 6 thousand 845 crores. In June 2014, the government’s debt status further reduced to about 17 thousand crore taka. In that year, the government repaid Tk 13,503 crore from previous loans, which is the highest record repayment of loans taken from the central bank.
In June 2015, the loan balance further decreased to Tk 11,231 crore. In that year too, without taking a new loan, he paid Tk 2,272 crore from the previous loan. By June 2016, the government increased borrowing again. As a result, the debt status increased to 21 thousand 874 crores in that year.
In that year, the government took a new loan of Tk 10 thousand 643 crores. As of June 2017, the debt status has again reduced to Tk 15,962 crore. In that year, the government paid off the previous debt of 5 thousand 912 crores without taking new loans. Since then, till June 2023, the government has not repaid any debt. Instead, they took new loans at exorbitant rates. Economic downturns and large government projects expose the economy to multifaceted risks by borrowing more from the central bank.
In June 2018, the government’s debt status from the central bank increased to Tk 23,678 crore. In that year, the government took a new loan of 7 thousand 949 crores. As of June 2019, the loan balance has increased to Tk 33 thousand 904 crores. 10 thousand 258 crore taka new loans were taken that year.
As of June 2020, the balance has increased to Tk 52,810 crore. That year the government took a new loan of Tk 18 thousand 906 crore from the central bank. Since March of that year, the economic activities in Bangladesh came to a standstill due to the corona virus infection. As a result, the revenue of the government decreases. On the contrary, government expenditure increases. As a result, the government has to borrow excessively from the central bank.
