Mahinda to present a supplementary estimate in the next parliamentary session: Bandula
ECONOMYNEXT – Prime Minister Mahinda Rajapaksa is expected to present a supplementary estimate to pay arrears for the contractors and suppliers for their service under the previous government, Minister Bandula Gunawardane said.
Addressing the media in Colombo this morning, Gunawardane said the previous government had failed to pay 130 billion rupees to contractors and suppliers who worked for government projects in 2019.
“At present, the Government is in a big financial crisis. Various contractors come to the politicians asking for the money for their work done during the previous government,” said Gunawardane.
“The accrued expense is 130 billion rupees which is one-fourth of the capital expenditure allocated for the year 2019”.
The current government is working on a vote on account till April 2020.
The vote on account passed for the first four months of 2020 amounts to 1,470 billion rupees for current, capital spending and debt repayments.
The minister said the former government failed to pay contractors and suppliers of projects such as ‘Gamperaliya’ and ‘Nearest School is the Best School’.
The minister further pointed out that the Treasury has no legal right to spend more than which is allocated by the parliament through the vote on account.
“Therefore, the prime minister will present a supplementary estimate to seek approval for extra funds to pay off the money following a special statement made in the parliament with relevant statistics,” the minister added.
The current administration had slashed value added tax, income tax for individuals and corporates and withholding tax on interest which has raised concerns over macroeconomic stability.
Ratings agencies cut Sri Lanka’s outlook to negative, prompting ratings and outlook cuts on most firms as well.
The government is currently amid a peak debt repayment cycle, and has to repay 4.8 billion US dollars in 2020.
Interest repayments are Sri Lanka’s highest public expense.
The finance ministry has said it is aiming to keep the deficit around 5.5 percent of GDP in 2020 with expenditure cuts. (Colombo/Jan30/2020)
Economic Intelligence Unit of the Ceylon Chamber of Commerce
Jehan Perera - Executive Director National Peace Council