News
President’s welfare budget tomorrow
President Ranil Wickremesinghe, as Finance Minister, will present tomorrow in parliament the Social Protection and Welfare Budget 2024 based on a medium-term fiscal framework with a sharp increase in welfare spending.
Sri Lanka’s welfare allocation for 2024 would be a sizable Rs. 200 billion compared to the previous budget’s Rs. 65 billion, a Finance Ministry official said. The existing tax system would be maintained by introducing some new direct taxes, including property and land taxes, while revising present taxes such as VAT and commodity levy, he said.
Economic stabilisation and national policies regarding the revision of public service salaries and private sector salaries will be unveiled in tomorrow’s budget.
The Finance Ministry’s National Budget Department officials had to conduct a comprehensive analysis in making a proposal to increase the salary of 1.4 million public servants and 600,000 pensioners.
Even if their salaries were increased by Rs. 10,000, the cost to the government would be high, at more than Rs. 14 billion a month and Rs. 168 billion a year, a former Treasury Secretary revealed.
This would be a challenging task for the national budget department, he said, adding that there was a possibility of granting public sector salary hikes even in two instalments while requesting the private sector to follow suit.
“The basic fiscal theory in this respect is to increase public and private sector salaries to the level of maintaining the stability of the rupee within the limit of private credit growth,” he explained.
The government will make necessary adjustments to the existing tax rates and bases, and a budget proposal will be made to improve the efficiency of tax collection and increase compliance.
The Appropriation Bill indicates an increase in allocated expenditure—to Rs. 6.56 trillion in 2024 from Rs. 5.85 trillion in 2023. Interest payments will record a 20 percent rise: to Rs. 2.63 trillion in 2024 from Rs. 2.19 trillion in 2023.
The government will be resorting to domestic borrowing of around Rs. 5 trillion to meet heavy expenditures in Budget 2024.
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