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Monday June 3rd, 2024

Sri Lanka seeks to raise more debt, hike spending in vote on account supplement

ECONOMYNEXT – Sri Lanka is seeking parliamentary approval to spend 156 billion rupees more and raise up to 357 billion rupees in gross debt, in a supplement to a vote-on-account or a mini-budget running up to April 2020.

“We request a supplementary estimate of 101 billion rupees for recurrent expenditure and 55 billion rupees for capital expenditure be approved for the vote on account,” Prime Minister Mahinda Rajapaksa who is also Finance Minister told parliament.

Rakapaksa also sought parliamentary approval to raise a debt limit from 721 billion rupees in the original vote on account to 1,078 billion rupees or 357 billion rupees for the four months.

The original vote on account estimated revenues at 745 billion rupees and total outflows including spending and debt repayment at 1,470 billion rupees.

Rajapaksa who took over after President Gotabaya Rajapaksa was elected President in November, said there were payment arrears and a revenue shortfall in 2019.

“In addition, to account for foreign debt, we request 2,011 billion rupees in a supplementary estimate,” Rajapaksa said.

“High interest loans had been taken, and some foreign loans exceeded estimates, so they have still not been accounted,” he said.

In 2019 Sri Lanka raised extra foreign debt, under new debt management law to pay loans in 2020.

Sri Lanka had also slashed taxes in a so-called ‘stimulus’ for 2020 with value added taxes halved, some taxes abolished, the cost of which has been estimated at about 500 to 600 billion rupees for the full year according to government spokesmen.

Rajapaksa blamed the last administration for running large payment arrears for suppliers which he had to pay.

He said out of about 2,400 billion rupees in revenue targets for 2019, collections had reached about 1,600 billion rupees by November, which grew to about 1,800 billion rupees in December, causing a shortfall of about 600 billion rupees.

Rajapaksa said there were arrears suppliers for expenditure incurred in 2019 around 156 billion rupees.

He said the government owed 45.86 billion rupees to banks for an interest bonus given for senior citizens.

Another 25.7 billion rupees were owed to pharmaceutical suppliers for state hospitals.

Road development contractors were owed 18.45 billion rupees, urban development contractors were owed 6.66 billion rupees and construction of schools had a price tag of 2.8 billion rupees, Rajapaksa said.

Election related expenses were 1.2 billion rupees, with another 400 million rupees required for the 2020 general elections.

The government also owed 23.51 billion rupees for fertilizer suppliers, which has caused problems in providing the fertilizer subsidy, Rajapaksa said.

Military and other state-dependent institutions were owed 5.5 billion rupees.

Capital projects at provincial, district and local government levels required 3.9 billion rupees, while Northern rehabilitation and resettlement needed another 3.1 billion rupees, Rajapaksa said.

Higher education and water supply projects had 2 billion rupees in delays while irrigation and rural development contractors were owed 6.6 billion rupees.

Other delayed payments totalled 13.3 billion rupees, Prime Minister Rajapaksa said.

Sri Lanka’s government will present a supplementary estimate to increase spending by 156 billion rupees for 2020 and expand the debt ceiling, as provisioned finances had run out by November, the Prime Minister said.

“The provisions were not enough to repay expenditure in November and December, so funds required for functioning the vote on account for the first four months of 2020 could not be released,” Mahinda Rajapaksa said in parliament on Wednesday.

“In addition, to account for foreign debt, we request 2,011 billion rupees in a supplementary estimate,” he said.

“High interest loans had been taken, and some foreign loans exceeded estimates, so they have still not been accounted,” he said.

An Active Liability Management Act allows for the government to raise extra funds to repay maturing debt.

(Colombo/Feb06/2020)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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