COLOMBO (EconomyNext) – Sri Lanka’s United National Party led minority administration suffered a shock defeat over a motion asking parliament nod to borrow more money through the sale of short term debt.
Finance Minister Ravi Karunanayake asked parliament to raise a ceiling on the sale of Treasury bills currently set at 850 billion rupees by another 400 billion rupees, as the limit was neared by outstanding instruments.
The motion to amend the Local Treasury Bills Ordinance to raise the ceiling on Treasury bills to 1,250 billion rupees was defeated with 31 voting for and 52 against.
If all ministers and deputy ministers of the bloated new administration voted for the motion, the regime would have been able to muster more than 52 votes.
In Sri Lanka the defeat of a finance bill leads to the resignation of an administration.
The motion to increase the ceiling on short term Treasury bill is related to finance but it does not ask for any additional spending or to increase the total borrowing limit.
The administration could still borrow money through Treasury bonds, which have maturity periods from 2 to 30 years to finance its expenses.