ECONOMYNEXT – Finance Minister Ravi Karunanayake said budget allocation for 2016 made to provincial councils through ministry for the subject was in line with a constitutional requirement and it was not an attempt to undermine or cut funds to the bodies.
He told reporters that funds for the provincial councils were allocated to the relevant line ministry from 1988 to 2004 which then gave it to each ministry.
But from 2005 to 2014 the funds were allocated to the Finance Ministry who then distributed it directly to the provincial councils, Karunanayake said.
That process was not according to the constitution, he said. Provincial Councils however preferred the money to be at the Finance Ministry, he said.
Karunanayake said there was a meeting with President Maithripala Sirisena on the matter.
President and Provincial Governors, and the Prime Minister are expected to meet on Thursday and also make a public statement, he said.
He said reverting the pre-2005 system was not an attempt to undermine provincial councils.
Karunanayake said the individual needs of the Provincial Councils were assessed by the Finance Commission of Sri Lanka and the Finance Ministry did not make such decisions.
The Finance Commission is an agency set up in 1987 under Sri Lanka’s 13th amendment to the constitution.
The government has to "on the recommendation of, and in consultation with, the Commission, allocate from the Annual Budget, such funds as are adequate for the purpose of meeting the needs of the provinces."
The Finance Commission itself had alerted him that the allocation had to be made to the line ministry on Provincial Councils, he said.
Karunanayake said in 2016, 163 billion rupees was allocated to Provincial Councils, up from 158 billion rupees in 2015.
Though there were complaints that 235 billion rupees were allocated last year for Provincial Councils, Karunanayake said the number mentioned was not the net allocation by the central government.
The 235 billion rupees also included the revenue generated by the councils themselves, he said.
However some questions have been raised over education spending, which had included imputed rents. (Colombo/December08/2015)