Third Vote on Account for 2020 on the cards
The Finance Ministry is now preparing another 3-month Vote on Account commencing from June 2020, the third for the year, to raise the necessary finances from the Consolidated Fund, the top official at the Treasury revealed this week.
The move comes amidst protests from opposition parties that the new government’s spending must be subject to Parliamentary approval.
The money will be used for uninterrupted government services, COVID-19 eradication activities and holding of Parliamentary elections.
There is special provision given under existing laws to withdraw money under the warrant of the President when the budget for the new financial year is not presented or the elections are underway and when a caretaker government is in place, Treasury Secretary S.R Attygalle told the Business Times.
This procedure is being followed under the present unforeseen circumstance for the second time during the current financial year, he said adding that in a similar manner two Vote on Accounts were presented in 2010 as well.
Authorisation of the President will be given for expenditure from the Consolidated Fund pending approval of the new Parliament, he disclosed.
This will be in accordance with the provisions of paragraph (3) of Article 150 of the Constitution.
Mr. Attygalle noted that income has come down in April due to the lockdown of economic activity while revenue collection of relevant authorities dwindled to a very low level.
Revenue collection of Excise Department and Motor Traffic Department came to a standstill while non tax income was marginal last month.
He noted that income and expenditure estimates of the new Vote on Account have not been finalised as yet.
However the Business Times learns that according to provisional estimates of the proposed, new Vote on Account, a total provision of around Rs. 1.2 to 1.4 trillion will be provided for government expenditure comprising both recurrent and capital expenditures.
The estimated government expenditure for the respective 3-month period is provisionally estimated at around Rs. 450 billion but this could increase under the prevailing COVID-19 situation.
Provisionally estimated state revenue for June-August 2020 will be around Rs.320 billion with a drop of over Rs.50 billion in tax revenue anticipated due to tax relief granted in January this year.
At least another Rs. 50 billion is likely to be lost in April and May 2020 due to a vast drop in non tax revenue.
Further there will be a 30 to 70 per cent drop in revenue from net exports. This could be balanced favourably by a predicted 22.5 to 55.5 per cent drop in the value of imports based mainly on lower global oil prices.