However, the amount of domestic borrowing will come down by the end of this fiscal as the World Bank at its board meeting on Wednesday approved a $200 million or Tk1380 crore development support credit.

Finance ministry sources said some other donors have already assured the government of increasing their assistance, and as per the assurance, $100 million may come from the Poverty Reduction Growth Facility (PRGF) programme of the International Monetary Fund (IMF).

During the July-March period of the current fiscal, the government's domestic borrowing amounted to Tk 7,258 crore, which was Tk 3,201 crore during the corresponding period of the previous financial year (2005-2006).

Of the total domestic borrowing, government borrowing from banking system increased by 411 percent to Tk 4,003 crore against Tk 783 crore during the same period of FY06.

Besides, non-banking borrowing especially through savings instruments went up by around 34 percent to Tk 3,254 crore in the first nine months of FY07. The amount was Tk 2,417 crore during the corresponding period of the last fiscal.

Foreign aid dipped by 4 percent during the July-March period of the current fiscal, contributing to increased domestic borrowing. The government received only Tk 3,749 crore in foreign aid during the period against Tk 3,911 crore during the same period of the last fiscal.

Explaining the reasons behind reduced flow of foreign aid, Economic Relations Division (ERD) sources said the immediate past 4-party alliance government banked heavily on local financial sources for implementing annual development programme (ADP). Besides, the last year's political deadlock also stood in the way of foreign aid inflow.

However, the present caretaker government has already started strong negotiations with the donors, the sources said, adding that a significant assistance is expected to come from both the multilateral and bilateral development partners.

According to National Board of Revenue (NBR), the target of revenue collection growth for the current fiscal was set at 21 percent in the national budget.

However, the growth in revenue collection during July-April period of this fiscal was only 9.06 percent, which also contributed to higher domestic borrowing. The revenue collection rate was 12.89 percent during the same period of the last fiscal.

The NBR set the revenue collection target at Tk 41,055 crore for the current fiscal, whereas until April it managed to collect Tk 28,487.63 crore, which is 69 percent of the total target.