Government deviates from FR in Rs.130 bn supplementary estimate
The government will be presenting in Parliament a supplementary estimate of Rs.130 billion more than 25 percent of the allocation made for present capital expenditure and debt repayments from the 4-month vote on account, a move that might deviate from normal protocol.
This move is likely to deviate from financial regulations as a supplementary estimate is normally for additional financial provision required for an unforeseen expenditure, a senior official familiar with the budgetary procedure told the Business Times. Supplementary estimates are normally not permitted when a vote on account is in force.
The presentation of supplementary estimates in Parliament is restricted as the government machinery is running with a limited budget of Rs. 1470 billion, he said adding that the Treasury has pruned all additional government expenditure at present.
The Treasury has no legal right to spend more than which is allocated by Parliament through the vote on account in accordance with financial regulations, he explained.
Prime Minister Mahinda Rajapaksa is expected to present a supplementary estimate to pay arrears for the contractors and suppliers for their service under the previous government, Minister Bandula Gunawardane said.
Addressing the media conference in Colombo, Minister Gunawardane said that the previous government had failed to pay Rs. 130 billion rupees to contractors and suppliers who worked in state projects in 2019.
A Ministry seeking approval of Parliament for additional financial provision required for an unforeseen expenditure, should in the first instance, obtain the approval of the Cabinet of Ministers and make its application to Parliament in the form of a Supplementary Estimate in terms of the Financial Regulations 74.
Over 3500 small and medium scale construction firms employing over 1.6 million workers are yet to receive their payments worth billions of rupees for state-contracted construction projects, official data showed.
Minister Gunawardane revealed that the Treasury has to repay Rs. 45 billion to banks to offset the losses caused by the special interest rate of 15 per cent granted for senior citizens.
The due payments to banks have not been made for 2016, 2017 and 2018, he added.
However, the supplementary provision that should be presented in parliament will have to be on par with approved total expenditure limits of the vote on account.
Therefore, either the borrowing limit or the maximum limit of total expenditure will not be increased due to granting of these supplementary provisions.
The purpose of this provision is to facilitate the smooth conduct of public finance management in a more efficient and effective manner, a senior official said.