Budget: Treasury grappling with ‘how to find funds’ syndrome
While the Government and the Central Bank project a vibrant economy in the country on the back of unprecedented goodies offered in the 2015 budget, the Treasury officials have been confronted with numerous issues in giving effect to the budget proposals.Finance Ministry and Treasury officials are grappling with the task of issuing relevant circulars, gazette notifications and operating instructions to the relevant line ministries, departments including Inland Revenue, Customs, Excise and Motor Traffic due to lack of clarity in certain budget proposals and the absence of Treasury Secretary Dr. P.B. Jayasundera from work at the ministry this entire week, official sources revealed.
Dr. Jayasundera is entrusted with the task of directing officials to issue these circulars and operating instructions and (only) he could sign some of these relevant circulars and gazette notifications, informed sources disclosed.
Urgent post budget functions at the Finance Ministry will resume after Dr. Jayasundera’s return to office tomorrow, November 3.
According to official sources, the Treasury Secretary was on leave as he needs some rest due to stress and strain that he had to undergo during the period of budget preparation particularly when making final adjustments to budget proposals and fine tuning it. But some officials said that he was indisposed.
Trade unions also issued another possible bombshell this week saying no proposals can be implemented unless they are approved by parliament. “The Finance Ministry has invited various trade and industry sectors at a meeting to be presided by the Treasury Secretary on November 5 at the Nelum Pokuna Theatre to detail how the proposals would be implemented. How can they do that when the proposals need to first be passed by parliament?” asked Joseph Stalin, General Secretary of the Ceylon Teachers’ Union at a budget discussion for unions on Thursday.
Political analysts said Mr. Stalin raises an interesting point at this juncture with an election expected in January and horse trading among parties taking place.
“The Government has a majority in parliament and in previous years, it was just a formality to get the budget passed. But with all kinds of speculation of crossovers, what if the government loses its majority and the budget is defeated in a vote?” one analyst asked.
Meanwhile there was complete confusion among sections of the society specially the business community, wholesale and retail traders, motor traders, exporters, bankers and even government officials as the whole budget 2015 was juggling a lot of facts and figures, business analysts said.
The implementation of tax proposals needs clarification from the Finance Ministry as the initiative taken by the 2015 budget to further simplify taxation has become complicated and the Inland Revenue Department and Customs are yet to receive relevant circulars and operating instructions from the Treasury, officials revealed.
The Treasury has allocated a massive sum of Rs.95,160 million as current expenditure and Rs.42,700 million as the capital expenditure to implement 77 development and welfare proposals made in 2015 budget,(Table IV Expenditure proposals), whereas, the total estimate of new revenue proposals is Rs. 65,500 million (Table 1, Revenue Proposals -2015). The Treasury has to find an additional sum of Rs 29,160 million to meet the current expenditure for new development and welfare proposals (goodies).
According to a table compiled by the Department of National Budget and Department of Treasury Operations and circulated among ministers only, the total revenue receipts and grants amounts to Rs.1,689 billion. However, the total debt repayments alone have been worked out at Rs. 3,155 billion.
A senior government official told the Business Times that the country is confronted with a serious economic situation as its gross borrowings are in the region of Rs.1,780 billion. It has been revealed that the net debt per capita is Rs. 321,000. It has been confirmed that it would rise to Rs.400,000 at the end of this year