SL steps into 2024 aiming to alleviate people’s problems

Sri Lanka steps into 2024 aiming to strike an elusive balance between reviving economic growth to positive 1.8 per cent from negative 3.8 per cent, alleviating the hardships faced by ordinary citizens and maintaining fiscal discipline in an election year.

The Government will be strengthening social safety nets by properly implementing the Welfare Benefits Act 2002 and updating the social registry system to cover all welfare benefit schemes.

Measures will be taken to strengthen social protection institutions, delivery systems, and targeting expenditure allocations to promote the utilisation of skills of the elderly, differently abled and widows as household entrepreneurs.

Till the voters elect the next government or the president in the middle of 2024 as scheduled, or earlier every move of the present government will be a more election-oriented deviation from economic recovery measures taken so far, several economic analysts said.

Against this backdrop, Sri Lanka continues to face severe economic, social and governance challenges despite signs of macroeconomic stabilisation with inflation moderating, exchange rate stabilising, and the Central Bank and Finance Ministry rebuilding reserves and fiscal buffers, they pointed out.

Government measures to address the balance of payment crisis, including tax reforms and cost-recovery pricing in the energy sector, have raised the cost of living while continued shortages of essentials, have been led to popular discontent.

The authorities aim to raise revenue by almost 45 per cent in 2024 to Rs 4.81 trillion in 2024, aided by taxes on international trade, taxes on domestic goods and services, license taxes and other taxes on income and profit along with non-tax revenue and grants, Finance Ministry data shows.

The government is compelled to continue the economic reform programme endorsed by the IMF following the unlocking of the second tranche of US $337 million — of the Extended Fund Facility (EFF) to Sri Lanka on December 12.

According to this programme, the government has to enact legislation by April 2024, strengthening accountability and rule of law and enact a Public Procurement Law that reflects international good practice.

A new Public Financial Management Law will have to be introduced in parliament in 2024 to strengthen the fiscal responsibility framework, budget formulation and execution and improve the quality of analytics in the Medium-Term Fiscal Framework, Ministry of Finance.