News
Lanka debt burden Rs 417,913 per person
Sri Lanka’s debt had gone up to Rs. 417,913 a person by the end of 2016, a jump of nearly Rs 45,000 within a year, the Auditor General has reported. By the end of December 2015, the per person debt had stood at Rs 373,462 . This had increased by Rs. 44,451, representing an increase of about 12 percent by December 2016, the Auditor General said in his report on Public Debt Management. By the end of 2005, the per person debt stood at Rs 108,908.
The AG said a further increase in the per person debt could be anticipated due to the continuing depreciation of the Sri Lanka rupee and due to reasons such as the inclusion of a considerable amount of foreign debt in the total public debt (exceeding 40 per cent) and its continuous increase.
The AG’s report painted a dismal picture of the country’s debt management and says that laws, rules, regulations and practices that govern the process of financial reporting inclusive of financial performances. It said these had been ignored and there was a dire need for formulating a methodology on reporting of accurate and reliable information.
The report said that according to financial statements furnished to Audit, the total account of domestic and foreign debt payable by the Government as at December 31, 2016 stood at around Rs 8.9 trillion (Rs.8,860,770 million). However according to the financial statements, the value of the total assets accounted to about Rs 1.1 trillion (Rs.1,087,225).
The AG said the immediate reason for this was the failure to utilise the total net borrowings sufficiently in keeping with the estimations in the investments activities and failure to correctly identify and account for the assets derived thereon.
“Even though the burden of debts of the country has increased rapidly, the assets generated by the utilisation of those debts had not been correctly identified and brought to account,” the report said.
According to the Fiscal Management Responsibility Act, the total liabilities of the government should not exceed 80 percent of the Gross Domestic Product (GDP). However, according to the 2016 financial statements of the Ministry of Finance, the total value of the liabilities as at December 31, 2016 had stood at Rs 9,865 billion. The AG observed that this was in excess of the maximum limit of liabilities allowed by the Act.