As if this is not enough, the balance of payments situation has a matter of concern as well. Forex reserves have dwindled by half a billion dollar. Even the fact that remittances from abroad saw a hefty rise could not make much of a difference to external current account deficits caused primarily by increased fuel bill. Also, export growth slowed down vis-a-vis import growth creating an imbalance there.

While a lid has been put on private sector credit growth the public sector borrowing has gone on unchecked. The tightening of private sector credit can only impede industrial growth at a time when capital goods and industrial machinery imports have increased. This will have a limiting effect on export growth too.

What is striking about the government's net borrowing from the banking sector is its increase by 2.42 per cent to Tk 620 crore in the first quarter of the current fiscal in stark contrast to a decrease by 4.76 per cent or Tk 1510 crore in the corresponding period of the last fiscal. This study in contrasts reads more edifying when one sees that last year there was net repayment of government loans to the banking system instead of net borrowing.

Basically, a budgetary balance has to be struck by no-nonsense austerity measures to keep inflation from rising further with attendant stagflation in prospect. The forex will have to be kept from further depletion by an extended tightening of the belt.

The revenue receipts are slightly behind target with a room for improved collection. Aid disbursements are likely to have fallen behind budgetary provisions and expectations in view of the World Bank programme of lending seemingly being on a deferred course.

Tightening of the belt is a hard choice for the government to make in an election year which has already seen incremental expeditions in the name of development. But it is one tall order the government must either be prepared to meet or see the economy in ruins with the voters making their own judgement.