ECONOMYNEXT – Sri Lanka’s state spending unit have been ordered by the Finance Ministry to strictly comply with spending restrictions and prioritize settling arrears and maintaining essential service, before starting new activities.
Sri Lanka has raised taxes in 2022 to reduce borrowings and halt money printing which triggers forex shortages
“Public expenditure in the year 2023 should be incurred more prudently that ever before, due to the current economic crisis,” a Treasury circular to ministries, department and state corporations said.
“Overdue bills pertaining to the year 2022, if any, should be settled prior to entering into new commitments in the year 2023.”
Spending agencies should the direct funds to maintain essential service. Attention should then be paid to competing nearly complete work, take action to ensure public safety in the case of partially done projects before starting any new commitments.
Though allocations have been made, availability of funds should be checked to prevent difficulties to contractors and service providers.
Concurrence of the Department of Treasury Operations should be obtained before enteriong into new capital projects of over 500 million rupees for 2023 and projects over 1,000 million even if they are to be paid in multiple years.
“In this respect, the Department of Treasury Operations will maintain a waiting list and give the concurrence according to the financial situation and priorities,” the circular said.
Officers were also warned against spending where provisions were not already made.
“The relevant officers will be personally responsible for such expenditure,” the circular warned. (Colombo/Jan02/2023)