Govt. paints doom and gloom ahead of mini-polls

Wednesday, 11 January 2023 00:00 - - {{hitsCtrl.values.hits}}

Cabinet Co-Spokesman and Minister Bandula Gunawardena

President informs Cabinet economic crisis more severe than expected
Orders all ministries to slash budgetary allocations by 5%
Samurdhi payments likely to be delayed by 2 weeks
Says potential income via taxes in first 3 months likely to be reduced
Cabinet Co-Spokesman says Treasury does not have sufficient funds to maintain day-to-day expenses
Asserts lending agencies involved in debt restructuring including IMF have called on Govt. not to resort to money printing

By Charumini de Silva

Ahead of mini-polls, President Ranil Wickremesinghe has ordered all the ministers to cut down 5% from the budgetary allocations of 2023 to manage the severe burden on the Treasury, whilst noting that Samurdhi payments could be delayed by two weeks.

“Before taking the Cabinet papers, the President informed the Cabinet of Ministers that the economic crisis is more severe than expected,” Cabinet Co-Spokesman and Minister Bandula Gunawardena told journalists at the post-Budget meeting media briefing yesterday.

Gunawardena said the Treasury is faced with a severe depletion of funds, and it is worse than what was anticipated.

“The potential income that may be earned through taxes in the first three months from January to March 2023 will be greatly reduced due to the adverse economic impacts of the ongoing economic crisis of last year and reduced tax income,” Gunawardena said.

He also outlined that the essential expenses of the State worker salaries, pension, and other welfare such as the Samurdhi allowances have proved difficult for January, February, and March.

“The Treasury does not have sufficient funds to maintain the day-to-day expenses such as the State sector employees’ salaries, pensions, and interests paid on Government loans and welfare expenses. At the end of each month, the payment of the Government workers and pension has been prioritised,” he explained.

As a result of the dire financial situation of the Treasury, he said the Samurdhi allowances to all low-income families are likely to be delayed by about two weeks, but assured payments will be made definitely.

“In the past, such financial gaps were managed by printing money to pay State workers, but lending agencies involved in debt restructuring such as the International Monetary Fund have strictly told Sri Lanka not to resort to such methods to bring financial discipline into the system,” he said.

Govt. admits impossibility of turning around economy in 2023