Inconsistency leads to mismatch in some budget numbers
Some inconsistencies in the Budget 2021 has led to economists and some opposition MPs questioning some of its numbers including several financial allocations which were over or underestimated.
Unveiling some omitted numbers relating to the government’s overall revenue and expenditure in the 2021 budget, economists said these figures are (elsewhere) available in the supplementary documents tabled in parliament.
According to 2021 budget estimates the estimated government revenue for 2021 is Rs. 1.96 trillion, expenditure is Rs. 3.52 trillion and as such the difference between revenue and the expenditure is Rs. 1.56 trillion (budget deficit).
But these figures according to estimates based on actual provisional data, should be government’s total expenditure for 2021 at Rs.4.8 trillion, revenue at Rs. 1.99 trillion while the budget deficit is Rs. 2.9 trillion, and the government’s total borrowings will be Rs. 2.99 trillion.
Of this (understated) amount an allocation of Rs.1.26 trillion has been made for the payment of loan instalments and another sum of Rs.860 billion to pay interest. Accordingly a total of Rs. 2.12 trillion will have to be spent next year for the payment of loan instalment and interest only.
Although the expenditure of Rs.3.52 has been indicated in the 2021 budget summary, the loan instalment and interest payment have been omitted which if included takes the total expenditure to Rs.4.8 trillion.
On page six of the budget, it was incorrectly indicated that the country’s per capita income has stagnated at US$4000 million instead of becoming a high middle income country. The actual per capita income during that period should be $4000 (per capita).
In another instance it was mentioned that national debt of 90 per cent must be reduced to 70 per cent, but the budget does not reveal how the government is going to meet $6 billion worth of foreign currency debt obligations falling due during 2021 while having only $5.5 billion official reserves with the Central Bank, they said.
Budget allocations to build 100,000 km of roads network, 10,000 rural bridges and estimates under several other expenditure heads were unrealistic as they were either underestimated or overestimated, economists said.
Former Finance State Minister and present MP Eran Wickremaratne described the budget 2021 as containing “senseless” revenue measures and proposals. Addressing a post budget talk show on a TV channel, he noted that there were no constructive revenue proposals in it.
He stated that although the government has estimated the 2021 revenue at Rs.1.9 trillion, it will fall short of at least Rs.300 billion to Rs. 1.87 trillion mainly due to dwindling earnings from tourism, exports and foreign remittances.
Although the government expects revenue of Rs. 530 billion from Rs.400 billion from external trade at present, it was not possible under the present circumstances, he pointed out, adding that the numbers in the budget are unrealistic. There were other opposition MPs who also said the budget numbers are unrealistic.