Change Govt. debt management: Harsha

Tuesday, 12 June 2012 01:01 - - {{hitsCtrl.values.hits}}

UNP MP Harsha de Silva in a statement released yesterday called for a change in the way the Government debt is being managed with Sri Lanka’s first sovereign bond of US$ 500 million coming in for settlement in October in an unprecedented single instalment.

Recalling that he had made a strong plea in Parliament last week, de Silva said that traditionally the annual Appropriation Bill only refers to a debt ceiling in one sentence and relies on officials to determine the best terms and conditions for its debt.

However, he said that given the seriousness of the issue where at present the country’s tax revenue is insufficient to meet the annual debt repayment obligation, consisting of the minimum interest and principal payment, and the composition of foreign debt changing rapidly from soft loans to commercial loans, perhaps the time has come to reconsider this position.

The Opposition Member’s argument was that given the ‘total control of public finance’ is with Parliament as per Article 148 of the Constitution not only income and expenditure but Government debt should fall within this broad purview.

He complained that while Parliament is asked to approve negligible tax revisions billions of dollars are borrowed on terms and conditions that are not conducive for sustainable development of the nation. He called for a nonpartisan approach to arrive at a consensus, perhaps even via committees, on how Parliament can exercise at least some control on the nation’s borrowing program.

He also mentioned that however much the Government says that it gets aid from China, the Ministry of Finance had revealed that for the entire year 2011 not a cent has been agreed upon as grants and the totality of the US$ 785 million from China were loans, and that too, majority on high-interest basis.