Sri Lanka kicks-start 2018 budget preparations cutting expenditure
Sri Lanka’s 2018 budget preparation is now underway with officials of the National budget department computing budgetary estimates based on the macro-fiscal framework.
Budget proposals will be made on the directions of Finance Minister Mangala Samaraweera in consultation with all ministries to determine budget limits considering priority programmes of the government.
All sectors representing trade investment, industry and public will be consulted in drafting budget proposals while maintaining resource allocations on development priorities consistently, a senior Finance Ministry official told the Business Times.
The government expects to increase revenue by ensuring effective tax revenue collection and efficient tax administrative reforms while pruning expenditure.
According to provisional estimates, 2018 budget revenue is expected to increase to Rs.2098 billion from Rs.1658 billion in 2017 and expenditure to Rs. 3360 billion from Rs.2732 billion in 2017.
These targets include increasing the public income up to 16.5 per cent of GDP, recurrent expenditure to be 14.8 per cent of the GDP, public investment to 5.3 per cent of GDP, reducing the budget deficit to 3.5 per cent of GDP and reducing public debt to 70 per cent of GDP.
The contribution from direct taxes will increase, shifting to a more progressive and fairer tax system. The National Budget Department has been directed to ensure that it does not exceed its expenditure targets.
A National budget 2018 circular issued by Treasury Secretary Dr. R.H.S. Samaratunga observed that during 2016 and so far in 2017 capital expenditure utilisation by spending agencies tend to remain substantially low, deterring the fulfillment of socio-economic development objectives envisioned in the public finance management.
The low rate of capital expenditure utilisation could be due to factors like capacity limitations, procurement delays, and lack of readiness to implement newly assigned projects, etc, the circular revealed.