President Ranil Wickremasighe the finance minister of the country is set to present an interim budget 2022 in parliament on Tuesday 30 with a full budget for 2023 expected to be unveiled in November.
The interim budget is considered crucial to sustaining Sri Lanka’s recovery from current economic crisis and social instability triggered by food, fuel and energy scarcity, presidential secretariat sources said.
It is expected to channel more spending toward policies aimed providing relief to the poor and vulnerable community and the middle class struggling with their low income to survive in high cost of living and economic difficulties.
The interim budget a revision of the budget 2022 which was not implemented due to economic crisis will be mainly focusing on revenue and expenditure for the next four months commencing from September 2022 while reallocating finances from areas that don’t deserve it , into places that need them, senior finance ministry official said.
Prime Minister Dinesh Gunawardena presented the Appropriation Bill No. 30, which includes government expenses related to this interim budget, to Parliament on August 9.
According to the new appropriation bill the Government expenditure for 2022 has been revised to Rs. 3275 billion (3,27 trillion) and it included the the new financial allocations to the .President, Prime Minister and various ministries.
In the budget 2022 presented by then Finance Minister Basil Rajapaksa on November 7, 2021, the Government expenditure estimate was Rs.2796 billion(Rs. 2.79 trillion).
The expenditure estimate of this year’s Interim Budget has increased by Rs.479.4 billion compared to previous budget 2022 estimate.
Total revenue including tax revenue, non-tax revenue, Provincial Councils’ revenue and grants is estimated to be at Rs.2.06 trillion for 2022.
The interim budget proposals include a major income support scheme and social security net for the poorest sector, farmers, fishermen and lower income earners and some relef for the middle class.
It is likely to introduce food ration scheme covering essentials like rice, wheat flour and dhal for the poor and strengthen nutritional assistance.
Allocation for pension payment of retirees will be increased to Rs. 270 billion from Rs.210 billion while increasing Samurdhi relief to around Rs. 350 billion from Rs.100 billion, a senior Finance Ministry official said
It has also proposed to allocate Rs. 200 billion as incentives to low- income families as well as the Small and Medium sector.
It has been prposed to reintroduce the tax system prevailed in 2019 from interim budget, while proposing an increase of taxes for tobacco and liquor targeting revenue of 8 -10 billion.
Agricultural loans to farmers who have land below two hectares will be written off, he said, adding that the ownership of state urban housing units will be given to occupants who are now residing in these housing units on a monthly rent.
Meanwhile Sri Lanka’s 2023 budget would aim to reduce the fiscal deficit to 6.8 per cent in 2023 from the projected 9.9 per cent in 2022,.senior treasury official said.
Sri Lanka is planning to reduce the budget deficit to 6.8 per cent of gross domestic product in 2023 from an expected 9.9 per cent in 2022 he said adding that a fiscal framework for 2023-2025.will also be introduced.
