First time no budget in a fiscal year
Third Vote on Account to be presented after Aug. 5 poll
For the first time in Sri Lanka’s history, a national budget is not being presented in a financial year. The Government is presenting its third vote on account (VOA) for the fourth quarter of the 2020 year managing the country without a national budget passed in Parliament, official sources said.
The Parliamentary election has been postponed to August 5 from the scheduled date of April 25 owing to the COVID19 pandemic which has delayed the convening of new Parliament.
The Vote on Account in the form of a mini budget 2020 is likely to be presented to new Parliament in August, after the election, for the period of September to
December as Parliament has not approved an Appropriation Act for 2020 due to unavoidable circumstances.
A comprehensive budget will be presented in November 2020 for the year 2021 and the new budget will come into effect from January 1 next year.
Government’s spending allocations for the first two quarters of this year have been made periodically under presidential authority as there was no possibility in presenting the 2020 budget as elections were delayed due to the COVID-19 pandemic, a senior Treasury official told the Business Times.
The decision to present the next Vote on Account has been taken to ensure uninterrupted continuation of state services and development activities during this period, he added.
The estimated total expenditure for the fourth quarter this year will be in the region of Rs.1630 billion while the revenue will be around Rs. 683 billion, provisional estimates revealed.
The total revenue for the year 2020 as a whole is projected to be close to Rs. 1,775 billion with tax revenue of Rs. 1,565 billion and non-tax revenue of Rs. 200 billion.
These revenue estimates are based on the assumptions that the economy would grow by 4 per cent in 2020. Economists have predicted lower economic growth this year due to COVID-19.
While the Finance Ministry is hoping to keep current spending at Rs. 2,799 billion, up from Rs. 2,915 billion last year, total expenditure for 2020 is however estimated to be close to Rs. 3,030 billion.
Expenditure estimates have been prepared taking into consideration the approved expenditures in the Vote on Account, salaries for public servants, expenditure on existing subsidy and welfare programmes, accumulation of unpaid bills, existing debt stock and interest rate structure and expenditures on ongoing and earmarked capital projects for 2020, according to provisional estimates.
It is expected that borrowings for 2020 on a net basis would be in the region of Rs. 1,257 billion. The total foreign borrowing on a net basis would be Rs. 523 billion, while the balance will be borrowed domestically, the estimates show.