Budget 2021: Sri Lanka’s most challenging task under uncertainty
View(s):The Finance Ministry is now finalising Budget 2021 in Sri Lanka’s most challenging task under uncertainty triggered by the post-lockdown economic outlook and the massive fiscal shock from COVID-19 with the decline in revenue and sky rocketing expenditure.
The Appropriation Bill for 2021 is scheduled to be tabled in Parliament in the second week of October, Finance Ministry sources said.
The annual 2021 budget estimates are now being prepared by the National Budget Department of the Finance Ministry within the Medium Term Budgetary Framework 2021-2023.
Priority will be given to projects which provide immediate relief to the people such as empowerment of low income families, upliftment of the rural economy and fulfilling the housing needs of the public. Among these projects are to provide drinking water to all, implementation of the programme for renovation and improving of 100,000 km of roads and aquatic resources and irrigation sector.
In this context, in preparing the budget estimates, it has been prioritising capital expenditure, improving the efficiency and potential of government revenue collection, rationalising recurrent expenditure and maintaining a proper financial management and discipline to reach the relevant economic targets.
Sri Lanka’s budget deficit in 2021 is expected at 8.29 per cent of GDP against 8.5 per cent in 2020.
Government revenue is expected to reach Rs.2.1 trillion in 2021 compared to Rs. 1.5 trillion in 2020, according to provisional data and analysts forecasts.
State expenditure is expected to record a new high of Rs.3.59 trillion compared to Rs.2.8 trillion in 2020.
According to estimates, the recurrent expenditure will be Rs.2.72 trillion and the capital expenditure will be Rs.867.79 billion in 2021.
The budget deficit of Rs.1.49 trillion will be financed via 37-40 per cent of foreign financing, while the remainder will be financed domestically.(BS)