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President to present Vote on Account this month
View(s):- Public sector salary increase of up to Rs. 7,500 in Budget 2025 with IMF approval
By Damith Wickramasekara
President Anura Kumara Dissanayake will present a Vote on Account (VoA) in his capacity as Minister of Finance during the first sitting week of the new Parliament this month.
The VoA will ensure the continuation of government services for four months until next April, after which the government will present the budget for 2025.
The Finance Ministry is compiling the VoA, according to a senior Treasury official. He told the Sunday Times it would be presented to Parliament once the new Cabinet approved it. The new Parliament is due to convene for the first time on November 21.
The official said the VoA needed to be debated and passed by Parliament before Christmas to make provisions to pay public servants’ salaries for the next four months.
A VoA would not include provisions to increase salaries of public servants, the official added.
Taking into consideration the current economic growth, the Finance Ministry estimates that a public sector salary increase of between Rs. 6,500 and 7,500 can be given through Budget 2025 without unduly burdening the Treasury. While this has already been budgeted, it will still need to be discussed with the International Monetary Fund (IMF).
Any move to increase state sector salaries beyond the Rs. 6,500–7,500 level, however, would mean the government would have to increase taxes to offset losses to the Treasury. This would most probably involve increasing the Value Added Tax (VAT) by 1 or 2 percent, the official revealed.
Former President Ranil Wickremesinghe, meanwhile, has called on the government to follow through on increasing state sector salaries by Rs. 20,000 in two stages as recommended in the Udaya R. Seneviratne committee report he had commissioned when he was President.
The Treasury official said the Finance Ministry had also budgeted the salary increase recommended during the former president’s government as it had aligned with the then government’s economic policy. “However, the current government’s economic policy is different, and this is why the lower amount had been calculated and budgeted. Any further increase will require extensive discussions with the IMF,” the official explained.
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