The Sri Lankan government is unable to accommodate additional financial allocations to resolve issues concerning state sector salaries and other discrepancies across government bodies, Minister of Transport, Highways and Mass Media Bandula Gunawardena said.
He said that political parties aspiring to come to state power will be obliged to adhere to the agreements with the International Monetary Fund (IMF).
Minister Bandula Gunawardena said parties aspiring to assume state power must inform the country if they are abiding by the agreements outlined by President Ranil Wickremesinghe, who is also the Finance Minister.
He further emphasized that there is no alternative for the future budget of the country, even if pursued without expecting international cooperation.
The Minister made these comments addressing a media briefing held at the Presidential Media Centre on Monday.
The following are three key factors outlined in Minister Bandula Gunawardena’s statement;
- State salary issues –
Several political parties have initiated protests and strikes. Consequently, a committee comprising the Secretary to the President and the Secretary of the Ministry of Finance has been established to address issues concerning salaries, including discrepancies across government departments, corporations, and statutory bodies.
The cabinet has also made a decision to propose solutions and incorporate them into the 2025 budget document.
- Budget 2024 –
Despite the government’s various needs, the 2024 budget cannot accommodate additional financial allocations. It is essential to note that over the past four decades, there has not been sufficient income to cover the day-to-day operational expenses of the government.
In 2023, the Inland Revenue Department collected Rs.1550 billion by raising all tax types, while the Department of Customs garnered Rs.923 billion from import and export duties. The Excise Department gathered Rs.169 billion, and the Department of Motor Traffic obtained Rs.20 billion. Non-tax income amounted to Rs.219 billion. Additionally, Rs.16 billion came as aid and Rs.304 billion through various deposits, summing up to a total income of Rs.3201 billion.
However, these revenues must cover the day-to-day operations of the government, including salaries, pensions, and subsidies like “Samurdhi” and “Aswasuma”, as well as loan interest. Consequently, a total expenditure of Rs.4.3 trillion was incurred solely in 2023.
- The IMF deal –
In drafting the budget for the upcoming year 2025, irrespective of the ruling government, it is imperative to address the loan agreements established with the International Monetary Fund (IMF) until 2028.
By 2025, it is anticipated that the external foreign resource gap will not adequately cover international transactions. Past trends suggest a projected need of USD 5018 billion for this purpose.
Any government formulating the forthcoming budget must secure this funding. To facilitate this, the IMF has consented to provide USD 663 million under the extended credit facility. The IMF has consented to furnish USD 700 million to address the budget deficit.
Additionally, the World Bank and the Asian Development Bank (ADB) have pledged USD 400 million and USD 300 million, respectively. It is anticipated that there will be a loan relief of USD 3655 million through the restructuring of foreign debt. (Newswire)