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Finance Minister Basil Rajapaksa’s maiden Budget, the second of the Sri Lanka Podujana Peramuna (SLPP) Government, was presented to Parliament on Friday (12) as the country struggles with one of the worst economic crises it has ever faced.

The Finance Minister himself had attempted to dampen public expectations on this being a Budget mostly focused on providing relief to the public already reeling from the spiraling cost of living. He had even told journalists that the Government would be forced to take from the people rather than give.

Making his Budget speech, however, Minister Rajapaksa termed it as a “futuristic people’s budget” presented during a challenging hour for the country. Mr Rajapaksa said estimated revenue loss over the past year alone due to the COVID-19 pandemic amounted to over Rs. 500 billion.

“We are living through the history’s most challenging period in terms of people’s lives, livelihoods, sources of income, and job security,” Mr Rajapaksa said, but added he still believed the Government was equipped with the necessary strength to manage the economy and overcome such challenges.

Given the massive revenue losses suffered by the state, Budget 2022 was mainly focused on minimising the continued strain on the economy. As part of these efforts, a host of measures aimed at tightening state expenditure were also proposed.

It has been the practice of successive Governments to introduce Supplementary Estimates to various Ministries seeking additional funds, resulting in more funds having to be allocated. Mr Rajapaksa proposed to include amendments to the Appropriation Bill preventing such requests for Supplementary Estimates for 2022 by all Ministries.

Among other measures aimed at saving revenue, the Finance Minister proposed to reduce the fuel allowance provided to Ministers and government officers by 5 litres a month, cut down the telephone expenses of government institutions by 25 percent and reduce the provisions for electricity by 10 percent to encourage the shift to electricity generated through solar power and other green energy sources. Except for office buildings that are under construction at the moment, Mr Rajapaksa also proposed to suspend the construction of new office premises for two years.

Another main proposal in the Budget was to extend the time period for Members of Parliament to be eligible to obtain pension from five years to ten.

Mr Rajapaksa further proposed to establish a new salary structure for the public service by removing the anomalies in public service salaries with effect from the next financial year. It was also announced that the Government had allocated an additional Rs. 30 billion to resolve the teacher-principal salary anomalies. The move is expected to finally bring to a close the near four-month-old trade union action launched by unions representing teachers and principals demanding an immediate solution to their salary anomaly issue that had been pending for more than two decades.

Budget 2022 also proposed to extend the retirement age of public servants to 65 years to strengthen the labour force. He justified this on the grounds that it was important to productively utilise their experience and skills set.

The Finance Minister was briefly heckled by Opposition MPs when he claimed that the Government “is always committed to safeguarding the farmers.” The Government has faced a flurry of protests by farmers over the fertiliser crisis that continues to threaten their livelihood.

Mr Rajapaksa, however, said the Government was committed to providing relief to farmers to encourage them to use non-toxic weedicide and organic fertilisers. Accordingly, Rs. 4000 milion has been allocated to promote alternative weedicide while Rs. 35,000 million has been allocated to provide support to farmers for additional expenses incurred to remove weeds without using chemical weedicide.

Among other major allocations that the minister proposed were Rs. 85, 000 for the “Gama Samaga Pilisandara” (Discussion with the Village) rural development programme, Rs. 31,000 million to provide relief to people under a Home Economy Security Programme and Rs. 10,000 million for the plantation sector.

Budget 2022 also proposes to allocate Rs. 15,000 million to implement a programme identifying economically poor families at the Grama Niladhari Division level and provide them with a relief basket to alleviate the pressure of the cost of living hike.

It was also proposed to extend the provision of the nutrition basket for pregnant mothers which is valued at Rs.10,000 each for a period of 24 months from the current 10 months. Minister Rajapaksa proposed to allocate a further Rs. 1000 million for this programme.

There were also proposals to provide relief to persons who were affected by the Covid pandemic lockdowns. They include school van drivers, three wheel owners and bus owners. Rs.400 million has been allocated to provide relief to school van and bus owners and Rs. 600 million to provide relief to the three wheel owners.

The Finance Minister also proposed a one-time tax surcharge of 25 percent to be imposed on persons or companies with taxable income over Rs. 2000 million for the year of assessment 2020/2021. The Government expects Rs. 100 billion to be earned through this tax. Taxes on cigarettes and liquor have also been increased.

It was also proposed to transfer to the Treasury the Rs. 8.5 billion that Perpetual Treasuries Limited had earned through the “Bond Scam” in violation of the Code of Conduct of the Central Bank of Sri Lanka.

Debate on the Second Reading of the Budget began yesterday and will continue for seven days till Monday, November 22. The vote on the Second Reading will take place on the same day at 5.00 pm. The Committee Stage Debate will begin on Tuesday, November 23 and will continue for 16 days, including Saturday, until Friday, December 10. The Third Reading vote will be held on December 10 at 5.00 pm.

Parliament made arrangements to present this year’s Budget debate in sign language. Accordingly, a Sign Language Window will be telecast simultaneously with the live telecast during the Budget debate.