Cabinet approves more measures to tighten state finances

Cabinet has approved a string of measures aimed at further cutting down government spending and tightening state finances. 

Accordingly, Cabinet approval was given to a proposal submitted by President Ranil Wickremesinghe in his capacity as the Minister of Finance, Economic Stabilization and National Policies to direct the Legal Draftsman to prepare a draft bill to supervise the statutory funds systematically maintained by Ministries, Departments and other state institutions and to implement a programme for the purpose.

The requirement to introduce a draft bill with the objective of managing funds owned by state establishments was tabled in Parliament by the President through a supplementary budget proposal 2022. 

In addition, Cabinet also approved a proposal submitted by the President to direct the Secretary to the General Treasury to take necessary measures to release imprest only for essential recurrent expenditure that is essential for maintaining public services until the situation becomes favorable.This was on the grounds that government revenue has declined to a value as low as 8.3% of the Gross Domestic Product due to the economic crisis. 

President Wickremesinghe also proposed in Budget 2023 to introduce the zero based budgeting with the aim of rationalizing state expenditure.

Through a zero based budgeting methodology, double counting of programmes expenditure wastage, low priority activities and efficient and productive methodologies of utilizing the allocation of existing provisions will be recognized through a systematic review.

Accordingly, the Cabinet approved the resolution submitted by the President to appoint 10 committees comprised of officers chaired by either a Deputy Treasury Secretary or a senior officer of the Treasury in order to conduct a systematic review on the following Ministries to which a higher portion of allocations are made from the annual budget estimations.

• Ministry of Transport and Highways
• Ministry of Public Administration, Home Affairs, Provincial Councils and Local Government
• Ministry of Education
• Ministry of Health
• Ministry of Agriculture
• Ministry of Plantation Industries
• Ministry of Defense
• Ministry of Public Security
• Ministry of Irrigation
• Ministry of Urban Development and Housing