Govt. revenue jumps in November, Expenditure-rise lower, Budget deficit dips

Government revenue in November and the first 11 months of 2022 has risen higher than expenditure prompting analysts to question the accuracy of President Ranil Wickremesinghe’s recent claims to the contrary. Aided by recent tax revisions Government revenue rose by a high Rs. 220 billion in November to boost the first 11 months cumulative figure to cross the Rs. 1.8 trillion mark. The latest figure reflects an increase of Rs. 486 billion or 37% in comparison to the first 11 months of 2021.

In contrast Government expenditure in the first 11 months grew by only 12.4% or Rs. 378 billion to Rs. 3.4 trillion. Government expenditure saw a high increase of Rs. 541 billion in October.

Last week in a note to the Cabinet, President Ranil Wickremesinghe, in his capacity as the Minister of Finance, Economic Stabilisation and National Policies, stated that the Government revenue at present (January 2023) is far below the monthly expenditure for the month of January 2023. As a result, the President noted that the General Treasury finds it challenging to meet all expenditures at this moment, except for payments for salaries, pensions, welfare, pharmaceuticals and debt servicing.

Therefore, President Wickremesinghe pointed out that the Government expenditure will have to be curtailed further/postponed until planned revenue to be raised on the recent tax revisions is realised.

He noted that the General Treasury will formulate a priority criterion for this purpose. Until then, the release of imprest will be curtailed. Furthermore, the President pointed out that public officers should refrain from obtaining goods/services on credit basis, and any officer who violates this will be held personally responsible for such expenditure.

Late last year Treasury officials sounded upbeat that the revenue effort was robust, helped by new measures despite the contraction in the economy.

As per data released by the Central Bank during the eleven months ending November 2022, overall budget deficit decreased to Rs. 1.6 trillion as against Rs. 1.7 trillion a year ago. In the first 10 months of 2022 the budget deficit rose to Rs. 1.64 trillion as against Rs. 1.57 trillion in the corresponding period of 2021.