Sri Lanka readies interim budget for 2019 amid political crisis
ECONOMYNEXT – Sri Lanka’s finance ministry has prepared a vote-on-account to get parliamentary approval for spending in 2019, Mahinda Samarasinghe, a member of the country’s disputed cabinet said amid a political crisis.
The vote-on-account will seek to maintain government spending for services for up to four months, legislator Mahinda Samarasinghe said.
Sri Lanka’s legal draftsman had been asked to prepare the required documents.
Sri Lanka’s budget for 2019 was de-railed after President Maithripala suddenly appointed ex-President Mahinda Rajapaksa on October 26, plunging the country into a political and economic crisis.
Rajapaksa had since suffered two votes of no-confidence in parliament and the Speaker has said a newly appointed cabinet stood dissolved and there was no Prime Minister.
Ousted Prime Minister Ranil Wickremesinghe, of Sri Lanka’s United National Party says he has the majority.
Samarasinghe said whether or not there is a majority can be seen when the vote-on-account is presented to parliament.
Wickremesinghe’s United National Party has called on state officials not to follow illegal orders.
Ex-Finance Minister Mangala Samaraweera claimed that Sri Lanka will not be able to repay debt without parliamentary approval after January 01.
The budget law (appropriation act) when passed usually authorizes the finance ministry to borrow a certain volume of debt for deficit finance and repayment of old debt.
The finance ministry said in a statement that under the specific laws under which borrowings are made, state funds can be used to settle them.
Sri Lanka’s central meanwhile has lost control of a peg, after cutting rates and printing tens of billions of rupees around the end of the first quarter of 2018.
The crisis has since is now sterilizing outflows by printing tens of billions of rupees each month. (Colombo/Nov21/2018)