New Year 2021 to dawn with renewed hopes of overcoming economic crisis
The economic misery of 2020 triggered by the COVID-19 crisis pushing people into untold sufferings which resulted in the government spending Rs. 70 billion to battle the pandemic, is likely to end in the New Year amidst renewed hopes of optimism.
The country’s public finances have been executed by the Treasury with severe constraints arising out of four Votes on Accounts in the whole year without an annual budget.
It has allowed only the financial provisions of public services and to provide allocations for already approved expenditure, Finance Ministry sources divulged.
Although there was limited space for the government to address the needs of the people immediately, a great effort has been made towards the management of the corona pandemic by the Treasury using the provisions of Votes on Accounts, budget 2020 estimates disclosed. The government has already spent around Rs. 70 billion for quarantining activities, random testing and related welfare activities, a ministry source said.
Hospital capacity for disease prevention, which was limited to Colombo, has now been increased to 17 hospitals in less than a year covering almost all parts of the country.
The number of special care beds for COVID patients has been increased to around 600. Daily PCR testing capacity for the diagnosis of the disease has been increased to an average of 7,500-10,000 tests per day with each test costing around Rs. 6,000, with the daily expenditure exceeding almost Rs.50 million, the source added.
Government also spends a sizable amount for the food and welfare of those on 14-day quarantine.
Apart from an allowance of Rs. 5,000 granted to low income families affected by the COVID pandemic the Treasury had to bear expenditure related to the payment of the allowances of public servants who are engaged in health and relief services and other related expenditure.
The government revenue has come down to around Rs. 1.6 trillion this year from Rs. 1.9 trillion in 2019 while expenditure has decreased to Rs.2.8 trillion in 2020 from Rs. 3.4 trillion last year, Finance Ministry statistics showed.
According to provisional data and econometric modeling, the Treasury is facing a negative cash and bank balance of Rs. 541 billion at present from Rs 304.4 billion as at end of April 2020 reflecting an increase of Rs.235.6 billion during the COVID period.