The government's borrowing from the banking system increased five times in the first 29 days of the fiscal year from a year earlier on the back of revenue mismatch.

From July 1 to July 29, the government borrowed Tk 9,447 crore from the banking system in contrast to Tk 1,722 crore a year earlier.

Typically, if there is a mismatch between earnings and expenditure, the government meets the gap by borrowing from both the central bank and commercial banks.

The government borrowing reached about Tk 14,000 crore a few days back, but it has been repaying the amount as and when the revenues are trickling in, said a Bangladesh Bank official.

In the next couple of days, the government may repay another Tk 5,000 crore, he added.

However, a finance ministry official said the government may have to borrow the full amount of its target towards the end of the fiscal year as the new national pay-scale will come into effect by October, due to which expenditure would soar.

To meet the budget deficit of about Tk 300,000 crore, the government is hoping to borrow Tk 38,523 crore from banks this fiscal year.

Last fiscal year, the government had a target to borrow Tk 31,714 crore from the banking system.

The finance ministry official said a high revenue growth target has been set for this fiscal year -- which is more than 30 percent -- and it is unlikely to be achieved.

So to meet the expenditure target, it will have to borrow from banks, officials said.

Last fiscal year, the sales of savings instruments increased significantly, which means the government did not borrow from banks.

However, the rate of interest on savings instruments was lowered by 2 percentage points in June. As a result, the sales of savings instrument may be less this year.

The monetary programme of the central bank has also kept space for more borrowing needs.

In this regard, the central bank's Monetary Policy Statement (MPS) said the government is likely to take more money from the banking system as reflected in the last budget and the BB has kept sufficient provisions for that.

It said the credit growth figures in the public sector have always been volatile based on the actual financing needs of the government.

It registered a negative figure of 2.5 percent last fiscal year, whereas the BB projects a positive growth rate of 23.7 percent for the current fiscal year.