Has the govt. overborrowed in its first month in office?

NPP says 'No'

* Govt admits issuance of Rs. 465.1 billion treasury bills; says routine practice of CB

* Rs. 400 billion treasury bills issued for debt servicing

* No breach of debt ceiling or impact on financial market stability

Admitting the fact that the Central Bank has issued treasury bills of Rs. 465.1 billion during the period between September 27 and October 15,a top economist of the government said it was not an additional loan obtained by the new government as alleged by some but it is a routine practice of the Central Bank to issue treasury bills for debt servicing.

President's Adviser on Economic and Financial Affairs Prof. Anil Jayantha Fernando told the Daily Mirror that Rs. 400 billion out of the total of Rs. 465.1 billion has been utilised for debt servicing.

He said it was not a new practice of the Central Bank to issue treasury bills for debt servicing and that it is a routine practice of the Central Bank.

Prof. Fernando said the government had obtained loans within the debt ceiling approved by the previous government adding that the said treasury bill issuance has no impact on the stability of the financial market or there has been no breach of debt ceiling either.

He said the opposition may be claiming of over borrowing by the new government either due to ignorance of the theory behind treasury bill issuance or just to create fear and uncertainty among the people just as they did before the presidential election.

SJB says 'yes'

- SJB alleges govt. borrowing Rs.1.34 billion per hour

- Questions what these funds are being spent on

- Warns country heading for another crisis

The Samagi Jana Balawegaya (SJB) alleged that the government is continuing to take unlimited loans without benefitting the country and that the government has received Rs. 419 Billion in treasury bills and bond loans within 13 days.

Former SJB MP Rohini Kaviratne said in a statement that the government had borrowed Rs. 419 billion in treasury bills and treasury bonds within 13 days between October 2 and October 15.

Kaviratne said the government is continuing to take unlimited loans and alleged the country was not benefitting. "The government has been unable to pay the outstanding Rs. 3000 allowance for pensioners for two months. They seem to be in difficulty in paying the increased salary of the government sector employees," she said.

She alleged the government has made new borrowings of Rs.142.2 Billion on October 02,Rs.85 Billion on October 09,Rs.95 Billion on October11 and Rs. 97 Billion on October 15.

She further said that in the last few days, the government has obtained loans of Rs. 32.23 billion each, which means Rs.1.34 billion per hour.

The former MP urged the government to clarify what investments were made using these loans.