Sri Lanka strives to manage public debt
View(s):Sri Lanka government is to manage its public debt without exceeding the maximum loan restriction in terms of Fiscal Management (Responsibility) Act, No.3 of 2003 as amended by an Act, No.15 of 2013, Finance Ministry sources said
The maximum value of liability as at the end of a particular year shall not exceed 80 percent of the estimated Gross Domestic Product (GDP).
According to financial statements, total public debt comprising of foreign borrowings and domestic non-bank loans (including net borrowings from Treasury Bills) should be managed by the Treasury without exceeding the maximum value of liability, the sources said.
The Government has raised the limit on Treasury guarantees, which allows off-balance sheet borrowing and spending through incorporated state agencies to 15 percent of GDP from the current 10 percent
A supplementary estimate of Rs. 200 billion submitted by the government for the control of the COVID-19 pandemic and other urgent requirements was passed in Parliament on Wednesday.
The government plans to spend an extra Rs. 131 billion in current expenditure including due to the COVID-19 third wave and capital expenditure of Rs. 69 billion, ministry data showed.
Out of Rs. 50 billion in a contingency fund, Rs.43 billion had already been spent.
The Finance Ministry initially proposed current expenditure of Rs. 2,534 billion in 2021 budget while capital expenditure was estimated at Rs.1,060 billion.
The Central Bank has announced a fresh issue of Sri Lanka Development Bonds (SLDBs) aimed at raising US$100 million which closed on Friday with June 30 as the settlement date. (BS)