Significantly up from the approved overall expenditure of Rs.4.67tn for this year
To contain fiscal deficit to 6.8%of GDP from the projected 9.9% this year
Govt. revenue expected to increase to 11.3% of GDP from the projected 9.1% this year
Targets to reduce primary deficit in the budget to -1.0% of GDP, from the projected -4.0% this year
The Cabinet nod has been granted to submit the draft Appropriation Bill for 2023 to parliament with an estimated total expenditure of Rs.7.92 trillion prepared under the theme of ‘making a transformative change via minimum inputs’ in line with the 2023-2025 medium-term fiscal policy framework.
President Ranil Wickremesinghe in his capacity as the Minister of Finance, Economic Stabilisation and National Policies sought the approval of the Cabinet of Ministers on Monday to submit the draft Appropriation Bill for the Year 2023 to parliament, after publishing the same in the government gazette.
According to Cabinet Spokesperson and Transport, Highways and Mass Media Minister Bandula Gunawardena, the total recurrent expenditure for the year is estimated at Rs. 4,634 billion while total capital expenditure is estimated at Rs.3,245 billion.
The estimated overall expenditure of Rs.7.92 trillion for next year marks a substantial increase from the approved overall expenditure of Rs.4.67 trillion for this year.
Gunawardena stressed that the government cannot abandon expenditure on salaries and pensions payments for public officials as well as social safety net programmes such as Samurdhi.
He however noted that the government has to exhaust 86 percent of the State revenue on these two recurrent expenditure categories.
According to him, Sri Lanka has the highest ratio of public officials in the world (per every 1,000 people).
In preparing the budget estimates, Treasury Secretary Mahinda Siriwardana has advised officials to also look at possibilities in cutting state expenditure as the revenue enhancing measures might take some time to be realised.
“Although, increasing the government revenue is a foremost necessity to bring down the budget deficit, the alternative of reducing the state expenditure has become mandatory, as it takes a certain period of time to increase government revenue.
In order to reduce the government expenditure while maintaining the quality of public service delivery, increasing a productivity is a must. Accordingly, the theme of preparing the budget 2023 should be ‘making a transformative change via minimum inputs’,” Siriwardana said.
According to Minister Gunawardena, the government aims to contain the fiscal deficit to 6.8 percent of the gross domestic product (GDP) in 2023, from the projected 9.9 percent this year, in line with 2023-2025 medium-term fiscal policy framework where the government targets to achieve a primary surplus of 2 percent of GDP by 2025.
The government revenue is expected to increase to 11.3 percent of GDP next year, from the projected 9.1 percent this year, while the government expenditure is to be reduced to 18.1 percent of the GDP next year from the projected 18.9 percent for this year.
The government targets to reduce the primary deficit in the budget to -1.0 percent of GDP next year, from projected -4.0 percent for this year.
However, Minister Gunawardena noted that the government aims to continue critical public investment projects to ensure minimum disruption to the public, such as new power plants and road and water infrastructure projects.
“Provisions allocated for certain sectors where traditionally more resources were allocated will be limited in order prioritise the sectors that provide direct and immediate benefits to the economy and provide relief to the people affected,” Treasury noted.
Gunawardena noted that the government is opened for fresh non-traditional ideas to increase revenue while reducing state expenditure to meet envisaged fiscal targets in order to come out of the current economic crisis.
The budget 2023 is slated to be presented to parliament next month.
Daily Mirror