Sri Lanka raises defence spending by 6%

Tuesday, 19 October 2010 23:43 -     - {{hitsCtrl.values.hits}}

AFP: Sri Lanka announced on Tuesday that it would raise defence spending by six per cent in 2011 – broadly in line with annual hikes announced during the Government’s war with Tamil rebels.

The Government allocated Rs. 215 billion (1.92 billion dollars) for defence in calendar 2011, according to official figures tabled in Parliament on Tuesday – about a fifth of the national budget.

Official sources say the State needs to keep defence spending high; despite the fact the ethnic war has ended, because of hefty instalment payments on military hardware bought to fight the separatist Tamil Tigers. Government forces crushed the rebels in May 2009, ending what had become Asia’s longest-running ethnic conflict that claimed up to 100,000 lives over nearly four decades, according to UN estimates.

The highest portion of the defence budget next year in the island nation of 20 million people will go to the Army. The Army will absorb just over half of the entire defence spending to maintain its 200,000 personnel, the figures show.

President Mahinda Rajapaksa, who is also Finance Minister, is due to unveil the full 2011 Budget on 22 November, when he is expected to announce new revenue raising proposals to meet State expenses.

Sri Lanka’s fiscal deficit shot up to 9.7 per cent of gross domestic product in 2009, exceeding the seven per cent target set by the International Monetary Fund when it released a US$ 2.6-billion bailout package in 2009.

Appropriation Bill presented

Appropriation Bill for 2011 was presented to Parliament by Prime Minister D.M. Jayaratne yesterday (19) morning.

The projected expenditure of the government for economic development for 2011 is  Rs.75.2 billion. The 2011 Budget will be presented in Parliament on 22 November.