Caution urged in Government spending, local borrowing
View(s):Sri Lanka’s cash-strapped government continues its spending spree and local borrowings to meet recurrent expenditure despite heavy debt servicing obligations, Finance Ministry sources said.
According to Treasury reports the government has spent Rs.403 billion, 91 per cent of the revenue earned during the first quarter of fiscal year 2018.
The revenue collected by the government was Rs.469 billion which was 90.2 per cent of the expected revenue, ministry data showed.
Expected state expenditure for the year 2018 is Rs. 3,982 billion, while the total estimated revenue is Rs. 2,175 billion, a senior Treasury official said adding that the collection of expected revenue has now become a difficult task.
Outlining the progress of development projects, he disclosed that 561 projects out of 1354 projects implemented during the first quarter of the year acquired more than 75 per cent of physical progress.
The progress of 444 projects was less than 25 per cent, he added.
Faced with the constant threat of rising public sector expenditure, the cash-strapped Government is set to rationalise spending on capital expenditure projects, Finance Ministry sources said.
The aim is to facilitate the Treasury cash management and improve productivity by maintaining fiscal discipline, revenue-based fiscal consolidation and rationalising government expenditure.
Cash inflows from revenue and other receipts to the Treasury were very much less than the outflow for recurrent and capital payments last year and during the first quarter of this year, a senior Treasury official said.
There was an increase in cash outflows to the capital expenditure which was more than the increase in cash inflows to the Treasury, he pointed out.
Therefore a cabinet decision has been taken recently to implement capital expenditure projects on a priority basis to facilitate the Treasury cash management.
Treasury Secretary Dr. R.H.S. Samaratunga has directed all secretaries and heads of departments to identify priority projects after ascertaining its necessity and the economic importance of the projects
(BS)