Budget 2022 takes new social direction

Sri Lanka budget 2022 is expected make an enhanced economic move taking a new social direction for the benefit of the public at a critical and challenging time in the country’s recent history, Finance Ministry sources divulged.

The exercise of final preparation of the budget will begin next month focusing attention on controlling public expenditure with fiscal targets, a high ranking senior official told the Business Times.

He disclosed that the budget deficit is likely to widen to about 11.5 percent of GDP in 2022 and this forecast is based on a GDP growth assumption of between 4.9 percent and 5.5 percent.

State revenue is projected to around Rs. 2.43 trillion in 2022 compared to Rs.2.01 trillion/ Rs 1.96 trillion in 2021, according to econometric models, and provisional estimates of the Treasury.

Every effort will be made to control public expenditure which is estimated at Rs. 3.53 trillion in 2022 compared to Rs. 3.52 trillion in 2021, he disclosed.

Pre- budget meetings with secretaries and senior ministry officials will be held soon to discuss the Ministerial level proposals for the upcoming budget already sent by them.

Finance Minister Basil Rajapaksa has already given instructions to senior Treasury officials to devise a public, market and business friendly budget while providing subsidies for the poorest of the poor and senior citizens.

He also directed them to ensure economic stability while bringing down the cost of living to a reasonable level by introducing people- friendly and practical fiscal policies to overcome the present macroeconomic challenges.

According to Treasury sources a sizable sum has been is allocated for the digitalisation and fulfillment of basic human needs, education and connectivity of the agriculture sector, health, education, e-commerce and rural road development and drinking water facilities.

Further, in order to accelerate economic growth and encourage private sector investment, during the period 2021-2025, the GDP will be maintained at an average of 6.0 percent.