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Discourse sans data

Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 13 March 2019 00:00


Budgets are increasingly receiving more importance but whether they have an impact with the public is anyone’s guess. For starters the annual Budget presentation has become a catalyst for providing handouts to the people, especially in an election year, with substantive discourse on the proposals largely revolving around proposals that are removed from economies realities. 

Even though the Budget has included some proposals to provide salary increases and other allowances to the public sector, pensioners, differently abled, pensioners and tax adjustments the impact that handouts would have on fiscal discipline is discussed little in the political sphere. The Government is actually slammed for not giving enough benefits, especially for farmers, which is difficult because the State does not have the capacity to give handouts without increasing Government expenditure. 

Maintaining shrinking Budget deficits is important for Sri Lanka given its high debt dynamics with rating agencies estimating Sri Lanka’s debt to GDP ratios increasing to 84%, partly due to currency depreciation. This means that Budget proposals need to revolve around increasing exports and investment to encourage stronger economic activity and not providing short-term growth boosts by reducing interest rates and pumping excess demand into domestic markets. 

Therefore emphasis needs to be laid on prioritizing the proposals and implementing the ones that have the most impact. Since Budgets are also part of providing policy consistency it is important to understand how the previous Budget has performed to get a better understanding of what the 2019 edition may stand a chance to achieving. This is especially important because heightened focus on politics could easily distract from economic imperatives in 2019.       

But finding a place to start is very difficult. This is largely because clear information on Budget implementation is extremely difficult to come by in the public domain. State Minister of Finance Eran Wickramaratne on Monday told parliament implementation of Budget 2018 has shown marked progress noting that 27.6% of its proposals have been completed, 64.2% in progress and only 8.2% stalled, insisting plans are underway to strengthen the implementation system to improve outcomes for Budget 2019. 

Speaking in Parliament, the State Minister said implementation of Budgets had improved over the last year and called on the public to understand the time-consuming nature of Budget proposals.  He said 67 Budget proposals were completed in full with 156 programs currently under implementation and only 20 proposals which have not started at all. Unfortunately the State Minister stopped at this point and moved onto discussing the positive points of Budget 2019. 

There were next to no details given of what the implemented proposals were, what kind of impact they would have on different aspects of Sri Lanka’s social and economic landscape and whether the important proposals have been picked up. The Budget gives details of how huge amounts of public funds are allocated but information of how they are used is rarely given to the public. This information gap has left huge questions of how public funds are ultimately used by governments and whether the pledges that are made are in fact realized. 

Not only should the Finance Ministry step up implementation, it also needs to have a mechanism to share this information with stakeholders. At a time when voluntary disclosure of information by the Government is declining there has to be a greater effort to improve public confidence in the Budget by increasing transparency.  

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