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The materialistic Charvaka philosophy states: “Rinam kritwa ghritam pibet, yavat jivet sukham jivet.” This translates to: “Even if you have to take on debt, eat ghee; live happily as long as you live.” This philosophy encourages consuming ghee through borrowing. However, in the context of today’s global economic situation, such an approach is quite dangerous. A general economic slowdown is visible worldwide. In such a state, eating ghee on borrowed money can invoke the Bengali proverb “Shire Sangkranti” – meaning that taking on debt can bring a major crisis or danger directly hovering over one’s head. Today’s luxury of consuming ghee turns into a terrifying burden in the future. When you eat ghee on credit today, securing even two meals to quench your hunger tomorrow becomes uncertain. Therefore, the theory of eating ghee on credit is obsolete in the modern era. Instead, the principle of being restrained today for the sake of the future is far more necessary and beneficial. Thus, the current economic philosophy is akin to the philosophy of staying healthy: eat less, stay healthy, and live longer.
Sri Lanka and Pakistan are prime examples of the consequences of eating ghee on credit. Sri Lanka went bankrupt some time ago precisely because it tried to eat ghee on credit. Now, having adopted the principles of restraint and austerity, the country has bounced back. Pakistan, by eating ghee on credit, has now turned into a defaulting state, floundering in a vicious cycle of debt.
During the Awami League’s 15.5-year rule, Bangladesh was submerged in an ocean of debt. Following the July Uprising of 2024, the 1.5-year interim government carried on with that same system, showing no desire to control it, and pushed the economy into an even deeper crisis by taking on fresh loans.
In the 2026-27 national budget, the allocation for servicing the principal and interest on debt has nearly caught up to the budget’s primary sectors, education and technology. By the 2028-29 budget, the sector of paying off government debt principal and interest may well become the largest expenditure item in the budget. At that point, like Pakistan, the Bangladesh government will be forced to take on even more loans every year just to service its domestic and foreign debt principal and interest. This is the “debt trap.” Recently, the Bangladesh government’s domestic and foreign debt crossed $204 billion, which is more than 40% of the GDP. The Bangladesh government is progressively drowning in an ocean of debt. As of November 2026, Bangladesh’s foreign debt standing has reached $116 billion, which is over 23% of the country’s total GDP. According to the World Bank and the IMF, a country’s foreign debt is considered dangerous only when it exceeds 40% of its GDP. Viewed from that perspective, Bangladesh is currently approaching the danger zone.
Realizing this reality upon assuming the responsibility of governing the country, Prime Minister Tarique Rahman has adopted a policy of expenditure reduction and austerity. Prime Minister Tarique Rahman is setting an example himself by curbing waste in government spending. Following a policy that not a single penny of the state treasury should be spent unnecessarily, the prime minister is trying to exercise frugality in his personal lifestyle as well.
However, despite the prime minister’s directives, the government has yet to break free from the cycle of past debt.
The gap between the government’s revenue and expenditure is steadily widening. Facing large shortfalls in revenue collection and pressure from government spending, the government is increasing its borrowing from the banking sector. In the first four months of the current 2026-27 fiscal year alone, the government has borrowed a net of Tk47,843 crore from the banking sector, already utilizing nearly 43% of the bank borrowing target set for the entire fiscal year.
Behind the government’s growing reliance on debt, alongside weaknesses in revenue collection, the pressure of paying increased salaries and allowances for government officials and employees plays a significant role. Economists believe that the implementation of a new pay scale could increase government spending pressure even further in the coming days.
On one hand, the government’s bank borrowing is helping cover budget deficits and manage regular expenditures. On the other hand, a prolonged and excessive reliance on bank loans risks constricting credit availability and investment opportunities for the private sector.
Especially when industrial enterprises and businesses have a demand for credit, heavy government borrowing from banks can create pressure on the financing capacity of the banks. Nevertheless, alongside borrowing, it is also crucial to consider the volume of old debt repayments and the overall money supply in the market.
The biggest challenge for the government in the current situation is to increase revenue collection and determine priorities in spending. If desired improvements in revenue collection are not achieved, the dependence on bank loans to cover the budget deficit could increase further. This is likely to impact both government financial management as well as private investment and the broader economy.
However, the current BNP government is by no means responsible for this situation. Upon taking office, the new government was burdened with over Tk23 lakh crore in debt. Furthermore, even in 2025, government borrowing growth from banking sources exceeded 32%. Faced with such circumstances from the very first day of taking power, the BNP government has had to confront these massive economic challenges.
Amidst the global economic crisis and the situation in the Middle East, the energy sector has now become the epicenter of the economy. The current government is working tirelessly to overcome deep crises inherited from the previous administration, such as revenue shortfalls, chaos in the banking sector, and the laundering of money abroad. The government has taken some positive initiatives to improve the investment and business environment. It will take more time for the benefits of these government initiatives to materialize. The big question facing the economy now is how quickly the investment-friendly and reformist initiatives taken by the government will bear fruit in reality, and how tough and effective decisions the government can make to tackle long-standing accumulated crises. Improvements in investment, the banking sector, and the energy situation will be the major benchmarks of the government’s economic success in the days ahead.
Ever since assuming office, Prime Minister Tarique Rahman has emphasized reducing dependency on debt. To this end, the directives issued by the government need proper implementation. These directives include: revitalizing the private sector and reopening closed factories; preventing corruption and enforcing a zero-tolerance policy against corruption; restoring discipline in the financial sector, ensuring transparency and accountability in the banking sector; recovering laundered money; refraining from unnecessary development projects; following a policy of restraint and austerity at all levels; finding sustainable solutions to the electricity and energy crisis; and increasing foreign investment.
Everyone must work together to achieve these goals. For this, pressure from various demands, such as wage increases, must now be minimized on the government. The private sector must be brought into confidence at any cost. Revenue collection must be increased.
We are currently passing through a time of crisis. If we walk the path of debt dependency as we did in the past for quick-fix solutions, we might find some relief today, but the crisis will only deepen further. Therefore, there is no alternative to breaking out of the cycle of debt. We must stop eating ghee on credit right now.
Audite Karim is a writer and playwright. Email: [email protected]