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Budget delivery


Comments / {{hitsCtrl.values.hits}} Views / Friday, 27 April 2018 00:00


The annual Budget is considered to be the policy blueprint of a government, but over decades in Sri Lanka, Budgets have become lists of unplanned, chaotic and sometimes irrelevant wish lists that are inconsistently delivered because they are not prioritised and practically targeted. The result is a loss of credibility and, even worse, incoherent policies that ultimately hamper growth.    

Budget 2017 is yet another example of this. Latest evaluation by Verité Research, a Colombo-based think tank has found that as much as 46% of the Budget proposals tracked by Verité fell into the Undisclosed, Broken or Poor categories, which accounted for Rs. 61.5 billion worth of proposals. The projects that were partially or completely fulfilled accounted for Rs. 55.4 billion. 

Budget 2017 also showed that Government priorities had largely remained mixed, with infrastructure and populist measures nosing ahead of economic promises. Among the promises that were fully or substantially implemented were Rs. 15 billion for issuing national digital identity cards and digitalising the economy, Rs. 5 billion for school equipment, and Rs. 4.5 billion for improvement of rural roads, but many others important for economic reform fell by the wayside.    

The Rs. 15 billion allocated to establish a national payment platform was only partially implemented, while Rs. 10 billion to establish an Exim Bank, Rs. 7.5 billion capital infusion to a Housing Bank, and Rs. 7 billion interest-free loan schemes to finance small business ventures were all broken. 

Rs. 1 billion allocated for a global marketing campaign to boost exports and foreign direct investment also recorded poor performance, with Verité struggling to gain access to details of the venture. A Rs. 1 billion contributory pension scheme was also put on hold. 

It is understandable that some proposals would be offloaded as too impractical or funds would be diverted to other purposes such as drought relief, but the fundamental problem in Sri Lanka is that governments fail to formulate well-vetted proposals beforehand with realistic budgets and goals ahead of including them in the Budget. Ideally, the Budget should be shorter and simpler with detailed plans of how to achieve each of the goals along with a timeline. 

Sri Lanka, with its significant debt and governance issues, can no longer afford to have budgets that do not walk the talk. Key reforms, including State-Owned Enterprise restructuring, improving exports, improving FDI and implementing pragmatic social welfare nets, need to be outlined in the Budget to give all stakeholders, including the private sector, a chance to base their planning on something solid. 

Achieving Budget proposals is also important because coalition governments are well-known for struggling to get all parties on the same page about what needs to be done. Policy stagnation seen after the Government came into power eventually overflowed into public impatience and anger resulting in electoral upheavals and political instability. 

Matters are not helped by lack of transparency and monitoring. Reports on Budget proposal implementation, such as those complied by the Department of Project Management and Monitoring, were also fragmented, with different promises evaluated in different quarters, making tracking virtually impossible. Nonetheless, these reports also give reasons as to why promises are not implemented, pointing out inadequate planning, limited resources and ambitious targets as the main reasons. This means the Government is aware of its issues but has failed to address them. Time is running out for them to do better. 

 


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