The Budget and realities

Evaluation of Sri Lankan Budgets may seem a futile exercise. The estimates of expenditure, as well as revenue, tend to be way out and the ultimate out-turn of figures much different from those presented in the Budget. Consequently, the all-important Budget deficit is very different to what is presented and the discussion of the inflationary impact is rendered meaningless.

According to analysts, this is likely to be repeated in the 2008 Budget where it has been said some of the expenditure for this year is not included in the estimates presented to Parliament. If true, this is a serious issue that a self-respecting Parliament must investigate for it strikes at the very root of Parliamentary accountability for public finance.

The Budget figures presented in Parliament indicate that the expected revenue of the Government more or less covers the expected current account expenditure. In spite of the huge increase in expenditure, the excess of current expenditure over revenue is only 0.7 percent of GDP. The Budget deficit of 7 per cent is therefore mainly due to increased capital expenditure.

This is a favourable development in public finances if this is the final realistic outcome. The pertinent question is whether expenditure would be contained within the parameters stipulated in the estimates and whether revenue collection would yield the expected amounts. Analysts feel neither of these would be attained. In fact, current expenditure is increasing significantly and likely to increase by more than that estimated in the Budget. The 2008 Budget would generate inflationary pressures both due to the unproductive nature of much of Government expenditure as well the fiscal deficit. Although much of the deficit is due to investment like infrastructure development, these expenditures too are inflationary as they are over a very long period and are very indirect. This is not to deny that they are much needed, but that the expenditure is inflationary is undeniable. The proposals have failed to simplify the tax system. In fact the corporate sector has made the point that companies are taxed at a much higher rate than the corporate rate of taxation, as many more types of taxes are added on. This Budget did little or nothing to resolve this problem. In fact, even at the personal level, taxation has been increased by the imposition of new taxes such as the environment tax, and the purchase of vehicles has been put beyond the reach of people. Taxes such as these can be expected to increase people's burdens rather alleviate the cost of living, and decrease the quality of life.

If the Budget 2008 is to achieve its objectives of containing the fiscal deficit within the stipulated 7 per cent without curtailing capital expenditure, the Government must have a strong resolve to ensure that public expenditure is kept within the amounts budgeted. Lack of financial discipline has been a hallmark of this Government. It is most likely that during 2008 there would be new or additional expenditures based on political considerations. If so, the Budget estimates that are under discussion are of little relevance to the country's economy.
Noise pollution

Noise pollution

We welcome another landmark Supreme Court decision this week -- that of curbing noise pollution. Gone are the days when tom-toms and conch shells had to be used to announce important public functions, when temple and church bells pealed or loudhailers had to be used to call the faithful to prayer. We are now living in a densely populated, urbanised and stressful world where places of worship are within short commutable distance of people.

The use of loudspeakers has been grossly abused by sections of all ethnic groups to the detriment of a multi-ethnic citizenry, the very anti-thesis of what their Teachers preached. Section 261 of the Penal Code relates to what a Public Nuisance is, and Section 80 of the Police Ordinance relates to the role of the Police in implementing these laws. But ask any citizen about making a complaint and one will be laughed in the face. Given the rank corruption within the Police, the complainant does so at his or her own peril.

Loudspeakers apart, there are other instances of noise pollution today. Take the case of construction sites, especially high-rise apartment complexes where building, drilling and laying concrete with bright lights continue right through the day and night in complete violation of Municipal laws.

The neighbourhood has to just grin and bear. Take the use of horns, especially by buses, many of which are owned by Policemen purchased from their ill-gotten gains. Then, the case of air pollution. -- two-stroke three-wheelers and belching buses being the major offenders. Since the Government must pay homage at the altar of the almighty vote for its sustenance, and is therefore reluctant to tackle these issues, it would seem that Public Interest Litigation is the antidote required against public nuisances for the safety of public health and the wellbeing of the long suffering, silent majority.