Nearly 60% of major proposals in Budget 2019 on track for completion: FinMin

Finance Minister Mangala Samaraweera speaks at ‘Green Club’ launch initiative in the presence of government officials in Colombo, yesterday 
Pic by Pradeep Dilrukshana  

By Nishel Fernando 

With nearly 60 percent of major proposals in Budget 2019 on track for completion, the government plans to revise the budget by reprioritising the remaining expenditure proposals to contain the fiscal deficit at a manageable level, due to the economic impacts stemming from the Easter Sunday attacks on the state revenue. 

“Around 60 percent of 84 major proposals that I presented in the last budget are either already implemented or being implemented; however, 16 of these major proposals are yet to be implemented,” Finance Minister Mangala Samaraweera said. 

He was speaking at the launch of the ‘Green Club’ initiative in Colombo, yesterday. The project announced in Budget 2019 proposed to establish community-based ‘Green and Unity Clubs’ in each Divisional Secretariat.

The project aims to ensure sustainable development of cities, towns, villages by conserving and protecting their ecosystems with the involvement of ‘Green and Unity Clubs’ consisting of various volunteer groups such as youth communities, elders’ societies, students and voluntary participants. 

Meanwhile, a Finance Ministry official told Mirror Business that they plan to finalise the revisions to Budget 2019 with the line ministries in August by reprioritising the expenditure proposals. 

However, he noted that the government would continue to fund the proposals, which are already in the implementation stage and would focus on realigning the priorities among the unimplemented proposals. In particular, the Treasury plans to discourage the expenditure proposals, which are related to the construction of new buildings. 

The Treasury expects the country’s fiscal deficit to be around 5-5.5 percent this year, due to the anticipated loss of state revenue from the negative economic consequences of the Easter Sunday attacks. Sri Lanka’s fiscal deficit improved to 5.3 percent of GDP in 2018 and the government was targeting to contain the budget deficit to 4.4 percent of GDP this year.  The government expects around Rs.8 billion decline from the VAT revenue on tourism this year, with the reduction in the VAT rates on tourism and the decline in tourist arrivals.   

During the first four months of the year, the country’s fiscal deficit already widened by Rs.112.8 billion year-on-year (YoY) to Rs.363.4 billion, driven by a significant decline in revenue from the import-based taxes and excise duties.  Further, the primary account balance also returned to red, recording a deficit over Rs.66 billion during the period under review, against a Rs.20.9 billion surplus in the same period of 2018. Speaking at the occasion, Treasury Deputy Secretary A.R. Desapriya announced that the Gamperaliya rapid rural development programme is on track with 22 percent of 82,600 approved infrastructure projects already completed. 

The government has allocated Rs.48 billion for the Gamperaliya programme in Budget 2019 and Desapriya noted that the Treasury already released over Rs.10 billion to divisional secretariats to settle the payments to contractors. The government has issued the necessary guidelines to complete all the projects under Gamperaliya by August 30 and to settle the arrears to the contractors before September 30. Samaraweera said the budget proposals such as setting up an Educational Excellence (SEE) Fund to offer scholarships to top performers at the Advanced Level examination to pursue their undergraduate education at top foreign universities will be implemented from this year. 

The government is expected to contribute Rs.500 million for the fund and plans to offer 14 scholarships annually to the students who top their respective streams at the Advanced Level examination.