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Budget to be presented on Nov 17

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by Saman Indrajith

The new government would present its first budget to Parliament on November 17, Parliament sources said yesterday, adding that however the matter on the dates for the debate had not yet been finalised

 In the Appropriation Bill for 2021, Government expenditure for the year 2021 has been estimated at Rs. 2.6 trillion with the limit on borrowing set at Rs. 2.9 trillion.

 The government on 20 Oct. presented two appropriation bills to provide for the financial years 2020 and 2021. Along with the Appropriation Bill for 2021, the government presented a separate bill to cover the expenses for 2020 including the funds withdrawn from the Consolidated Fund under the authorisation of the President between March and August this year.

President Gotabaya Rajapaksa authorised the withdrawal of funds from the consolidated fund using powers vested in him under Article 150 of the Constitution, once in March and again in June during the period Parliament stood dissolved with elections postponed due to the COVID-19 outbreak.

Following the election victory of the SLPP in August 2020, Parliament approved a resolution to obtain around Rs 1.7 trillion to cover state expenditure for the next four months of the year by way of a Vote on Account .

The government expenditure for 2020 is estimated to be around Rs 2.538 trillion for the service of the period beginning on 1 January, 2020 and ending on 31 December, 2020. The limit on borrowings this year is Rs 2.65 trillion, according to the Bill.

In the Appropriation Bill for 2021, the government expenditure for the year 2021 has been estimated at Rs. 2.678 trillion with the limit on borrowing set at Rs. 2.9 trillion.

The highest allocations in both years will be for the Ministries of Defence, Highways and Provincial Councils.

The limit on borrowings for the financial year 2021 has been set at Rs. 2,900 billion with the details of such loans to be incorporated in the Final Budget Position Report which is required to be tabled in Parliament under section 13 of the Fiscal Management (Responsibility) Act No. 3 of 2003.

The highest allocations in the Budget will be for the Ministry of Defence topping Rs. 355 billion (Rs. 355,159,250,000) of which Rs. 316 billion (Rs. 316,806,290,000) will go for recurrent expenditure while capital expenditure at Rs. 38 billion (Rs. 38,352,960,000).

The State Ministry of Internal Security, Home Affairs and Disaster Management will get around Rs. 152 billion (Rs. 130,818,002,000 for recurrent expenditure, Rs. 21,647,040,000 for Capital expenditure).

The State Ministry of Provincial Councils and Local Government under which allocations are made to the nine PCs will get over Rs. 338 billion of which around Rs. 279 billion (Rs. 279,824,000,000) will be recurrent expenditure and around Rs. 58 billion (Rs. 58,250,000,000) capital expenditure.

The Ministry of Highways will get around Rs. 330 billion, of which around Rs. 329 billion (Rs. 329,999,590,000) will be capital expenditure and Rs. 185,415,000 recurrent expenditure.

The Ministry of Public Services, Provincial Councils and Local Government will get around Rs. 271 billion of which over Rs. 270 billion (Rs. 270,473,000,000) will be for recurrent expenditure and Rs. 1 billion (Rs. 1,250,000,000) for capital expenditure.

The allocation for the Ministry of Finance is around Rs. 157 billion with recurrent expenditure amounting to over Rs. 100 billion (Rs. 100,338,845,000) and capital expenditure stands at Rs. 57 billion (Rs. 57,264,870,000).

The Ministry of Education will get over Rs. 126 billion with over Rs. 102 billion (Rs. 102,670,000,000) allocated for recurrent expenditure and around Rs. 23 billion (Rs. 23,870,000,000) for capital expenditure.

The Ministry of Health has been allocated around Rs. 159 billion but the bulk of Rs. 128 billion (Rs. 128,480,998,000) will go for capital expenditure and around Rs. 30 billion (Rs. 30,995,000,000) for recurrent expenditure.

The Ministry of Urban Development and Housing will get around Rs. 23 billion (Rs. 530,341,000 for recurrent expenditure and Rs. 22,990,858,000 for capital expenditure.

The expense head of the Office of the President has been allocated close to Rs. 9.3 billion (Rs. 9,345,660,000) of which Rs. 3,206,180,000 will go for recurrent expenditure and Rs. 6,139,480,000 for capital expenditure.

The office of the Prime Minister will receive Rs. 1,051,750,000.

Party Leaders who met for a special meeting at the Parliament Complex last week had decided to take up the Appropriation Bill 2020 on Nov 12 and pass it the same day, Parliament sources said, adding that they also decided that the government would present budget 2021 on Nov 12.

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There’s nothing prescribed as Parliament has failed to enact legislation for contempt of court — Sumanthiran

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TNA MP M. A. Sumanthiran, in an intervention in Parliament, said he was privileged to appear for Ranjan Ramanayake, a clean, honest politician in the Supreme Court and he was proud of that.

Nevertheless, Ranjan Ramanayake was convicted and sentenced. The sentence of four years’ rigorous imprisonment was unprecedented and exceptionally severe, and Parliament has a responsibility in this regard because we have not enacted a law for contempt of court, the MP noted.

At the outset, he said, “I want to flag one or two issues concerning the responsibility of the Parliament in this regard. But before I do that I am bound by law and tradition to disclose my interest in the matter. I am the counsel who appeared for Hon. Ranjan Ramanayake in the Supreme Court”.

This has an implication to the article in the constitution that the Hon. Leader of the Opposition just mentioned because it says for an offense for which the prescribed punishment is two years or more. But there’s nothing prescribed, nothing prescribed in the law because for long Parliament has failed to enact legislation for contempt of court, the TNA MP said.

Although there had been in the public as well, a lot of instances where drafts have been made, we have not done that – that is one. And by failing to do that, it has been like the freedom of the wild ass; anything can be given as a sentence and that is not a good thing.  I don’t want to go into the merits of the case or anything like that, but in this case Parliament has to take steps, to enact a law, he further said.

English law is supposed to be the substantive law because we don’t have a statute law now, and in English law itself scandalizing the court is no longer an offence of contempt of court. But unfortunately the court disregarded that, and has misdirected itself – that’s my position, Sumanthiran continued.

“But I want to bring to your notice a serious lacuna in the law with regard to a statue for contempt of court that has resulted in this unprecedented injustice to an honest Member of Parliament”, he added.

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Colombo share market gallops to all time highs

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The Colombo Stock Exchange (CSE) galloped last week with the benchmark All Share Price Index (ASPI) hitting an all time high on Monday and improving on that performance on subsequent trading days to close the week at 8,463 points on Friday. The more liquid S&P Index that normally trails the ASPI also gained sharply though less so than the benchmark index.

Brokers and analysts attributed the surge to prevailing low interest rates and said that people holding funds in fixed interest instruments have seen greater potential in the stock market and have so far not been proved wrong.

“Take the case of vehicle importers,” said one businessman. “With imports disallowed, cash that would have been once used to replenish inventory becomes available for investment elsewhere. The stock market is a magnet for such funds.”

Also, many companies have resorted to a share split strategy to make their shares both more liquid and more affordable on the market.

“Take the example of a fifty-rupee share split into two. Theoretically, it should then trade at Rs. 25 a share after the split. But often it does better than that at no cost to the company that had split the share because its stated capital remains what it was,” explained and analyst.

“It’s different in the case of bonus shares or scrip issues as they are called where reserves are capitalized to pay for the new shares priced at realistic values.”

Last week the Hayleys conglomerate announced share splits in over a dozen group companies. These ranged from each share being split into ten in the parent company (Hayleys) and thriving subsidiaries like Haycarb and Dipped Products while other companies like Kingsbury split a share into two.

Brokers and analysts said that the current market surge was largely driven by the Dhammika Perera controlled Hayleys and the Ishara Nanayakkara controlled LOLC groups.

Last week Hayleys announced over a dozen share splits including in its recently acquired Singer Group companies. The majority of these involved dividing each share into two though at Singer Sri Lanka each share will be split into three.

The biggest share split ever proposed is one that is pending at EB Creasy (EBC) where each share is to be split into 100. The seldom traded EBC share is quoted at the top end of the CSE sharelist. Analysts said the massive split is intended to pump liquidity into the share and make it more affordable.

“There’s a lot of retail play in the market right now with new investors who recently took some risk doing very nicely in this bull run,” a broker said.

The CSE hit rock bottom after a seven-week closure in March last year.

 

 

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Covid-19 has now spread geographically across SL

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In small numbers to an extensive region

Pandemic situation in Western Province improves

by Suresh Perera

Though there are no big Covid-19 clusters at present, the dreaded virus has spread geographically across the country due to the unrestricted movement of people, a senior medical official said.

“The transmission of the contagion in small numbers to an extensive region was inevitable in a society which remains ‘open’ with inter-provincial travel happening on a daily basis”, says Dr. Hemantha Herath, Deputy Director of Public Health Services.

He said the spillover from the Western province was expected as there was an outflow of people to other districts particularly during the festive season.

“I am not blaming anybody, but a lockdown was not viable when taking into account the economic consequences and the livelihoods of the people. We could have imposed a curfew to restrict travel during the New Year, but we have to consider the fallout of such a measure”, he noted.

It true that geographically numbers have increased within a wide area, but the numbers are small and there are no big clusters as seen at Minuwangoda and Peliyagoda, the senior medical official explained.

Asked whether the pandemic has translated into a community spread as considerable positive cases continue to emerge on a daily basis, Dr. Herath replied, “no, that has not happened. If the Covid-19 situation was beyond control, we would have made a social and community transmission declaration”.

He said the pandemic situation in the Western province has improved with a dip in positive cases. However, the spillover is evident by the jump in figures at provincial level.

“We knew there was a risk, but we had to take it as locking down the country was not the solution

For example, if a Covid-19 patient infects two persons per day, there will be 200 positive cases within 100 days and one can imagine the critical situation that will emerge if the trend is allowed to continue, Dr. Herath continued.

“We are now managing under 1,000 cases per day”, he said, while assuring that the right mechanism is in place to identify positive cases through PCR and rapid antigen screening and place them under medical treatment, isolate and quarantine first contacts of patients”, he further said.

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