Guidelines issued for Preparation of Annual Budget Estimates - 2024

The Secretary to the Treasury has issued a circular specifying guidelines for the Preparation of Annual Budget Estimates for 2024.

Issuing the circular, Treasury Secretary Mahinda Siriwardana has noted that since 2022, Sri Lanka has undergone "an unprecedented, catastrophic and deep crisis," which led to severe and far reaching economic, social and political consequences. The fallout of the crisis has impacted the entire society, with disproportionate impacts partcularly felt by the poor and the vulnerable.

In response to the crisis, "the government initiated a committed and focused reform drive to implement long delayed but much-needed reforms, supported by an Extended Fund Facility (EFF) programme from the International Monetary Fund (IMF), with a futuristic vision to implement tough structural reforms to restore stability and drive forward sustainable growth," states the circular.

"Consequently, having surpassed an extremely challenging period of turbulance in 2022, the Sri Lankan economy is gradually showing signs of stability on many economic fronts, supported by the aforementioned reforms, with initial indications of moving out of recession towards recovery and eventually growth."

There is however, no room for complacency and no margin for error to deviate from the envisaged reform path by reverting to unsustainable policies and practices of the past, warns the circular. 

"Making a transformational change through minimum inputs" which has hitherto not received enough attention from spending agencies, should be the common goal of every government institution in formulation of the budget for the year 2024, while ensuring that value for money is generated on expenses, always, asserts the Treasury Secretary. 

"In that respect, due attention should be paid to fiscal consolidation based on automation and digitization in delivery of public services, introduction of cost-reflective pricing methods, making revenue administration efficient and organising of government activities to minimise costs."

New projects should not be included since it will be difficult to find adequate financing to commence new projects with the Medium-Term Budgetary Framework 2024-2026, states the circular. Special attention should be paid to the use of renewable energy, the use of modern technology and digitization in development projects. 

The Treasury notes that the restrictions imposed on the purchase of vehicles by the National Budget Circular No.03/2021 will remain in effect for the year 2024 as well. 

It further states that new recruitments will not be made to the Public Service in the year 2024. Hence, no allocations will be made for this purpose. 

"As the government has decided to broadly look into welfare programmes, when budget estimates for the year 2024 are prepared, no provision should be included for any subsidy or welfare programme implemented on decisions taken at institutional level, except for the programmes implemented by virtue of any law or with the approval of the Cabinet of Ministers," states the Treasury.  

Click on the following link to read the Treasury Secretary's circular in full: https://sundaytimes.lk/230806/Budget%20Circular%2004-2023-full.pdf