Sri Lanka’s economy is projected to see moderate growth of 2.2% in 2024, showing signs of stabilization in the wake of public investment disbursement acceleration under strict regulation
But, the country still faces elevated poverty levels, income inequality, and labor market concerns, says, following the severe economic downturn of 2022.the World Bank’s latest bi-annual update.
At the same time, private investment growth has slowed sharply in all South Asian countries and the region is not creating enough jobs to keep pace with its rapidly increasing working-age population
The government has allocated a massive sum of Rs 1.2 trillion for public investment projects in 2024 issuing guidelines require all project proposals utilising the Consolidation Fund to be submitted to the National Planning Department (NPD) where there undergo preliminary and detailed appraisal before moving to the funding arrangement stage
Break down of project investments this year for seven key sectors are social Infrastructure Rs. 210.64 billion, agriculture Rs57.72billion ,commercial infrastructure Rs.743.33billion governance Rs73 billion ,environment Rs7.14 billion Social Protection Rs13.29 billion and ,regional development Rs.71.47 billion, finance ministry data shows.
According to a latest department circular, a significant number of project proposals are directly submitted to the Cabinet for approval skipping appraisal by the NPD entirely.
Approval of the projects without NDP’s appraisal and recommendations creates major deviations such as duplication of similar projects by different institutions, inability to prioritise development initiatives, and mismanagement of constrained fiscal space, it added.
The government is to accelerate public investment disbursement for priority projects generating return on investment to further economic growth post-crisis period this year.
Disbursing public investment capital is vital for the country’s economic recovery as it looks to bounce back from the negative effects of the pandemic and slowdown in its economy.
A new public finance management (PFM) Law will be promulgated soon, with an integrated public investment management (PIM) section with provisions that establish a unified approach to prioritising capital investment projects based on explicit criteria early in the budget process
The Ministry of Finance is required to ensure that all projects included in budget documents are from the list of assessed and prioritised projects.
An enhanced regulatory framework will be established for treatment of unsolicited proposals including the manner in which such proposals can be received and evaluated.
The ministry is to publish on a government website a list of funded projects that have originated as unsolicited proposals every 6 months, along with information on lead contractor for the proposals, contract cost, and implementation progress.
