The Sundaytimes Sri Lanka

Budget 2013: Daunting task of cutting deficit


With 2012 budget targets already gone awry, Treasury officials have begun the preparatory work for the November 2013 budget giving priority to cutting the budget deficit to 5.8 percent of Gross Domestic Product (GDP) from 6.2 percent projected for 2012, Finance Ministry sources said.

The Treasury has called and received revenue estimates for 2013 from all accounting officers and officials and will evaluate these estimates commencing next week. Projected revenue for 2013 is Rs.1, 352 billion while the expenditure would be Rs 1, 765.86 billion, the sources said.
Treasury officials are struggling to bring down the budget deficit because expenditure for the first three months has soared and on these trends, the deficit could shoot to 11.2 per cent of GDP in 2013; thus bringing it down to a single digit is a huge challenge, they said.
The planned budget deficit for this year is Rs. 468 billion, which in terms of the GDP is Rs. 6.2 %. However, in the first quarter of this year, the budget deficit shot up by 2.8 %.

The revenue shortfall has increased by 24.2 % or Rs. 334.8 billion while the revenue from tax earnings had increased by only 10.3 % or Rs. 203 billion. Debt is to be reduced to 70 per cent from the current 75 per cent of GDP. Pre-budget meetings with officials will begin in September, they said. The public, professionals, academia, artists and the media will also be invited to submit their proposals and suggestions before September 30 and also indicate any failures in projects and ways of correcting these, aimed at ensuring the 2013 budget will facilitate speedy development in the country.

The President has begun the consultative process and the Finance Ministry would work on these lines during July.

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