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Bill for 2021, the government presented a separate bill to cover the expenses for 2020 including the funds withdrawn from the Consolidated Fund under the authorisation of the President between March and August this year.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.
BASL asks govt. to inform SC how it intends to address crisis
second case before five-judge bench also to be mentioned today
By Shamindra Ferdinando
Amidst economic chaos caused by the disruption of fuel and LP gas supplies as well as severe shortage of food and medicine, the Bar Association of Sri Lanka (BASL) has filed a motion requesting the Supreme Court to take up cases pertaining to alleged violation of fundamental rights due to the deprival of basic requirements of the people. A senior spokesperson for the BASL yesterday told The Island that they would be represented by Dr. Kanag Iswaran, PC, Uditha Egalahewa, PC, Suren Gnanaraj, Pulasthi Hewamanne, Lakshmanan Jeyakumar and Niranjan Arulpragasam instructed by GG Arulpragasam. The cases would be taken up today (04). The BASL is seeking interim relief.
The BASL has acted in terms of Articles 17 and 126 of the Constitution. The motion has been filed in respect of cases over fundamental rights violations under Articles 11, 12(1), 13(4), 14(1)(g), 14(1)(b), and 14 A of the Constitution.
The BASL spokesperson said that the cases were to be taken up today for the Counsel for the respondents to inform the apex court of measures taken to improve the situation. Copies of the motion, affidavit and the annexures have been delivered to the Attorney General.
The respondents are the Attorney General, both former and present members of the Cabinet, including Prime Minister Ranil Wickremesinghe, both former and present members of the Monetary Board, several other officials and three stare enterprises, CEB, CPC and SPC.
Responding to a query, the BASL Spokesperson said that the BASL had amended the affidavit to include those who accepted cabinet portfolios following the appointment of Ranil Wickremesinghe as the Prime Minister on 12 May. The official pointed out that a week after the appointment of the new Premier, the Governor of the Central Bank Dr. Nandalal Weerasinghe had declared that Sri Lanka was suspending debt repayment pending negotiations with the International Monetary Fund (IMF).
The BASL has brought to the notice of the Supreme Court several pertinent matters namely disruptions to the supply of petrol, diesel, LP gas, kerosene, electricity and medicine, the inability of the public to engage in income-generating activities owing to the disruptions to public and private transport and health services, food supply and court proceedings, and the likelihood of breakdown law and order.
The affidavit also includes a section of BASL statement issued on 27 June on the continuing fuel shortage and its impact on the people. The BASL has urged the government to inform the public immediately of its plans to ensure the continuous supply of fuel in the short term, present a roadmap for the fuel crisis, and to devise, after proper consultation with the relevant stakeholders, an effective plan to ensure the fair and equitable distribution of fuel to the people taking into account the need to ensure that public transportation and essential services are not hindered.
Referring to contradictory statements issued by those who represented the government, including Sagala Ratnayake, Chief of Staff of Premier Wickremesinghe, the BASL has stated that none of the respondents has so far informed the public of measures to alleviate the suffering of the people.Meanwhile, a fundamental rights violation case in which Prime Minister Wickremesinghe has been named as the first respondent as regards the economic crisis will be mentioned today (04) to fix a date for support. The case will be taken up before a bench of five judges.
Dr. Athula Kumara Samarakoon of the Open University, Sri Lanka, Soosaiappu Neavis Morais and Dr. Mahim Mendis have petitioned the Supreme Court. The application filed in terms of the Articles 17 and 126 of the Constitution has named the entire Cabinet of Ministers, including former PM Mahinda Rajapaksa and Basil Rajapaksa and Ali Sabry, PC as respondents. Among others named are former presidential secretary Dr. P. B. Jayasundera, ex-CBSL Governors, Prof. W.D. Lakshman and Ajith Nivard Cabraal and ex-Treasury Secretary S.R. Attygalle.
Members of the CIABOC (Commission to Investigate Allegations of Bribery or Corruption), too, have been made respondents; the petitioners have in a letter, asked the CIABOC members to investigate the mismanagement of the economy by former members of the Monetary in violation of Section 70 of the Bribery Act as well as lawmakers Mahinda Rajapaksa and Basil Rajapaksa. The petition cited the controversial decision taken to reduce a range of taxes in terms of SLPP presidential election candidate Gotabaya Rajapaksa’s manifesto titled, ‘Vistas of Prosperity’ as one of the major causes of the current crisis.
The petitioners have stated that as at April 2022, the price of essential goods had increased from the previous year as follows: (a) The price of Petrol increased by 85%; (b) The price of Diesel increased by 69%; (c) The price of a cylinder of Liquid Petroleum Gas increased by 84%; (d) The price of turmeric increased by 443%; (e) The price of bread increased by 433%; (f) The price of rice increased by 93%; and (g) The price of dhal had increased by 171%
The petitioners have cited incumbent CBSL Governor Dr. Nandalal Weerasinghe’s statement before the Committee on Public Enterprises (COPE) on 25 May in support of their argument. Dr. Weerasinghe was quoted as having told COPE that the government lacked foreign currency reserves to pay its foreign debt or buy essential imports, and the assistance of the International Monetary Fund and foreign nations was required.
The petitioners have also quoted statements made by ex-Finance Minister Sabry to underscore the crisis created by what they call the wrong policies of the then government. They cited President Rajapaksa’s unilateral decision to prohibit the use of chemical fertiliser and agrochemicals as another reason for the crisis. Issues such as the government using foreign reserves to prevent the depreciation of the rupee have also been raised by the petitioners. Statements made by Dr. Ranee Jayamaha and Sanjeeva Jayawardena PC, two appointed members of the Monetary Board, before the COPE were also cited in support of the petition. They were quoted as having said that they received instructions to use dollar reserves to hold the rupee as Rs. 203 in spite of their strong objections
Dr. Godahewa warns govt. over its IMF strategy
‘Current crisis has given us an opportunity to rectify wrong decisions’
By Shamindra Ferdinando
SLPP lawmaker and one-time prominent Viyathmaga activist Dr. Nalaka Godahewa says the government has not been able to bring talks with the International Monetary Fund (IMF) to a successful conclusion for want of a cohesive action plan to reduce expenditure and increase revenue.The former Minister said so when The Island sought the former mercantile executive’s response to the current status of government negotiations with the IMF.
“The issue at hand is that we haven’t been able to convince the IMF of our plans to address the daunting task. The government cannot sidestep contentious issues as the IMF expects us to come up with a clear action plan to enhance income and reduce expenditure,” the Gampaha District MP said.
Responding to another query, Dr. Godahewa warned the government that finalization of an agreement with the IMF wouldn’t be possible as long as the government delayed presenting a proper plan. The lawmaker questioned the validity of the presentation made by the Finance Ministry to the IMF delegation. Had the government convinced the IMF and as well as other lenders an agreement could have been reached during the recently concluded talks in Colombo.
Participating in a discussion arranged by a group of Kelaniya undergraduates over the weekend, Dr. Godahewa explained the responsibility on the part of the government to reveal how it intended to repay debt.
Instead of repeatedly giving excuses and warnings of further deterioration of the economic status, the government should without further delay address four key issues namely how to increase foreign/domestic income, bring down expenditure in foreign currencies/domestic expenditure.
Dr. Godahewa said that the unprecedented economic crisis had given the incumbent government an opportunity to take appropriate remedial measures to rectify a spate of wrong decisions taken by successive governments over the past several decades. Unfortunately, the government seemed not capable of taking advantage of what the former media minister called a golden opportunity to push for required reforms with the support of all political parties represented in Parliament and other stakeholders, particularly the trade unions.
Dr. Godahewa warned that printing of currency notes continuously to meet budget deficit was nothing but a horrendous blunder.The government should concentrate on expenditure control while being tough on waste, corruption, irregularities and mismanagement, the new entrant to Parliament said. According to Dr. Godahewa, waste, corruption, irregularities and mismanagement perpetrated by successive administrations had caused significant loss of revenue over the years and the incumbent government was no exception, the ex-minister said.
Commenting on public sector enterprises, the Gampaha District lawmaker said that though there were 420 such ventures, the Treasury considered only 52 of them important. Of those categorized as important, the CEB (Rs 21.4bn), CPC (Rs.82.2 bn) and SriLankan Airlines (Rs 170.7 bn) suffered a staggering loss of Rs 270 bn in 2021.
Dr. Godahewa said the country could no longer afford to bear such huge losses. Therefore, restricting was nothing but an urgent necessity, the government MP declared, pointing out that the government lacked the wherewithal to sustain utterly incompetent public sector.
Dr. Godahewa gave a breakdown of the public sector. According to the latest available data, there were 1,402,000 in the state sector comprising ministries and departments 792,000, Provincial Councils and Local Government 390,000 and state enterprises 220,000.
In 2021 alone, their salaries and other payments cost the government Rs 845 bn whereas 672,000 pensioners received payments amounting to Rs 270 bn. Therefore, the total expenditure stood at Rs 1,115 bn (Rs 845 b +Rs 270 bn), Dr. Godahewa said, adding that amounted to staggering 80 percent of the total income.
The MP called for the pruning of the public sector declaring it was a very heavy burden. Public Administration Secretary Priyantha Mayadunne recently said that Sri Lanka could manage with about 500,000 public servants though the current strength of the public sector is 1.5 mn.Dr. Godahewa said that all unnecessary posts and positions should be gradually abolished.
USD 587 needed for planned fuel imports
By Rathindra Kuruwita
Sri Lanka must pay 587 million US dollars for planned fuel imports, until mid-August, Minister of Power and Energy, Kanchana Wijesekera yesterday (03) told the media in Colombo.This amount was equal to 217 billion rupees, at an exchange rate of 367 rupees per dollar, he said.
On Monday, Sri Lanka had to pay the Indian Oil Company (IOC) 34 million dollars and another 76 million dollars to a Malaysian company. On 06 July another 34 million dollars will have to be paid to the IOC.
“On 08 July, we need to pay for three shipments. 19.95 million dollars to the IOC. 49.54 million dollars to Singapore company Vitol and 66.53 million dollars for United Arab Emirates-based Coral Energy DMCC . This comes to 136.2 million dollars. On 10 July we must pay 36.43 million dollars for a furnace oil shipment, and 82 million dollars to Coral for a shipment of crude oil. These 316 million dollars are for ships that will arrive in July,” he said.The Minister added that 122 million dollars had to be paid to the IOC for two ships carrying petrol and 67 million for one carrying diesel in the coming weeks.
“These ships will arrive by mid-August,” he said.
The Minister said that they must pay for suppliers upfront and initially the Central Bank of Sri Lanka (CBSL) and the Treasury had insisted that they could allocate only 125 million US dollars for fuel imports.
“Given this limitation, we tried various methods to procure fuel, but without success. We tried new suppliers but that also led to many issues. So, ultimately, the President and Prime Minister decided that the Ministry has to be given money to purchase fuel,” he said.
Minister Wijesekera said that he had spoken to the Governor of the CBSL and Treasury Secretary for foreign currency to purchase fuel.
“It’s not easy. They have promised to give us rupees and we have to find dollars. We need to get the dollars from exporters or international banks. Will they give us dollars at 367 rupees? What will happen if they ask for a higher exchange rate? I will ask the Cabinet today to approve paying higher rates if the need arises,” he said.
Oil companies will only provide oil after payments are made because Sri Lanka owes these companies hundreds of million dollars. Between November 2021 and April 2022, alone CPC had to pay 326 million dollars to companies through the Bank of Ceylon, 242 million dollars through the People Bank and 80 million through other banks, he said.
“The CBSL Governor is talking to seven suppliers. He has given payment schedules so that weekly or monthly payments could be made. We have given them guarantees. Still, they won’t supply new shipments unless upfront payments are made.
Minister Wijesekera said Sri Lanka had, on 30 June, paid 11 million USD to buy 7500 metric tons of diesel from LIOC. The diesel consignment will be sent from LIOC facility in Trincomalee to Colombo today (04). By Sunday afternoon, CPC had 12,774 metric tons of diesel, 1,414 metric tons of petrol 92, 2647 metric tons of petrol 95, 233 metric tons of super diesel, 500 metric tons of jet fuel and 29,000 metric tons of furnace oil used to produce electricity, he said.The Minister said that the first fuel shipment to the country for July is a diesel shipment that will arrive on 08 or 09 July. This will be supplied by a UAE company. Singapore’s Vitol will send another ship carrying diesel between 11 and 14 July. Another diesel shipment might arrive between 15 and 17 July. However, this shipment had not been finalised yet, he said.
“On 22 or 23 July a patrol shipment will be provided by the IOC. The diesel shipment that might arrive between 15 and 17 July is also to be supplied by the IOC. The IOC has asked us to settle 50% of the payment by today and deposit the rest by Wednesday. We requested them to let us pay 30% by Wednesday. We have also spoken to the Malaysian government and they might provide us with 50,000 metric tons of petrol and 10,000 metric tons of kerosene. This has not been finalized. If this works out, we might get a petrol shipment by 10 or 11 July,” he said.
Wijesekera added that the crude oil shipment expected from UAE’s Coral will consist of 135,000 metric tons. On 12 August another crude oil ship is expected, he said.
Speaking about his visit to Qatar, Minister Wijesekera said he had met a number of officials and they might provide Sri Lanka diesel, crude oil, furnace oil and gas at a concessionary rate, at the discretion of the Emir of Qatar. “Even if this happens, it won’t happen overnight. If we need to buy oil, we could buy directly from their private companies, the Qatar officials said. Qatar is not an exporter of petrol or jet fuel. They are a gas giant, though. The Qatari officials said that they had proposed to build an LNG terminal in 2019, but there had been no response from Sri Lanka,” he said.
The Minister said that he had also spoken to the Qataris about oil exploration in Mannar.Minister Wijesekera said he had asked CPC officials to provide him with a procurement plan till December. He added that the CPC was overstaffed.
The Minister urged the expatriate Sri Lankan workers to send in remittances through the banking system and help revive the economy and ameliorate the suffering of fellow citizens.
“Once the fuel starts coming in the queues will disappear. I want to add another thing. There is now a token system in place. However, we have never asked for this system. What I said last month, announcing that we will only be providing fuel to essential services, was to give a token to people who were in the queue at that time. I specifically asked people not to join queues anew. Now only LIOC is distributing fuel to private vehicles, and they have started a token system. This is not what we wanted,” he said.
BASL asks govt. to inform SC how it intends to address crisis
Dr. Godahewa warns govt. over its IMF strategy
USD 587 needed for planned fuel imports
‘Dates have the highest sugar content to fight Coronavirus’
U.S. Congress to probe assets fleecing by US citizens of Sri Lankan origin
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