27 August 2022 06:30 am Views - 1400
The budget 2023 - 24 will provide a paradigm shift to the entire system of governance in Sri Lanka with drastic changes to economic fundamentals, budget control, monetary management and the continuation of State Owned Enterprises (SOEs) among other proposals, Mass Media, Transport and Highways Minister Bandula Gunawardena said.
Elaborating on the necessity for a complete overhaul of the system of governance, for the country, Minister Gunawardana who is also the government spokesman told the media at the Information Department that Sri Lanka’s state policies adopted by so-called economists, management consultants and top administrators who have advised the successive governments have miserably failed to meet targets, bring desired results, enhance productivity and development or improve the life standard of the people.
“Our country is in a debt trap - foreign and domestic. The daily state revenue is Rs. 400 billion while we spend Rs. 1,000 billion per day leaving Rs. 600 billion deficit every day. A massive 80% of the total annual revenue of the government is spent to pay the salaries and pensions of public servants. The simple theory for this catastrophe is that we spend much more than what we earn. There has been no proper fiscal management or budget control. In 2013, the target was to maintain a budget deficit of 5% of the GDP by 2020 and government debts at 60% of the GDP. However, by 2021, the budget deficit precariously stood at 12.2% of the GDP and the local debt ratio was 107.6% of the GDP. The foreign debts are over US$ 51 billion. The high cost of living, and scarcity of essential food commodities, fuel, gas, medicine and fertilizer are a direct outcome of those wrong fiscal and administrative policies. The situation has been further aggravated by injecting 1.2 trillion rupees with no purchasing power to the economy by the first quarter of 2022 through money printing,” he noted.
That is why Sri Lanka desperately needs a complete overhaul of the entire, monetary, administrative, and financial system from the bottom to the top. The budget 2023 will address this issue in a futuristic viewpoint and in the process, the government would go for a complete restructuring and diversification of loss-making SOEs, Minister Gunawardana emphasized.
Financial imbalance resulting from the decline of state revenue in the long run and the escalation of government expenditure has now developed into a major economic crisis. Amidst these challenges, the preparation of the budget 2023 within the median budget framework of 2023 – 2025 should be performed with prudent and strategic means while measures must be taken to prevent more intensity to lay the foundation for future sustainability, he stressed.
The interim budget for the remaining period of this year (September – December) would also be presented in Parliament on next Tuesday (30) by President Ranil Wickremesinghe as the Minister of Finance, Economic Sustainability and National Policies, after the Parliament met on August 29th, Minister Gunawardana added.