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Sri Lanka is hoping to cut the budget deficit to 4.0 percent of gross domestic product and generate a 2.0 percent revenue surplus, Treasury Secretary P B Jayasundera said.
Sri Lanka ran a 6.4 percent of gross domestic product overall deficit in the budget in 2012 and a 1.4 percent revenue deficit before capital spending.
In 2013 the overall budget deficit is planned to be 5.8 percent of gross domestic product with 0.1 percent marginal revenue deficit.
"A further reduction in reduction in the fiscal deficit towards 4.0 percent in GDP by generating a revenue surplus in a magnitude of around 2.0 percent of GDP through an enhanced revenue effort is a major component of government strategy," Jayasundera said.
He was speaking to economists and insurance industry sector representatives at the launch of a book on insurance law and practice by Wickrema Weerasuriya, a specialist in banking law who is now the island's insurance ombudsman.
Amid a slowing economy, meeting the 2013 targets had been tough.
In the first four months of 2013 Sri Lanka ran a revenue deficit of 1.8 percent of GDP and an overall deficit of 3.9 percent of GDP.
Sri Lanka has not been able to run a revenue surplus, where the state limits current spending to a level below total revenues, since 1987.
Jayasundera did not specify a time frame for the 4.0 percent deficit and 2.0 revenue surplus.
"It involves maintaining an uncompromisingly high growth and further rationalization of tax efforts through a broadened tax base and improved tax compliance," Jayasundera said.
Sri Lanka has seen tax revenues fall as a percentage of GDP but Jayasundera has also managed to prevent current spending from overshooting too much, though there have been heavy losses in state enterprises.
Latest emerging data show that state and state enterprise borrowings from the banks are reducing.
Jayasundera said successful management of fiscal challenges will help improve the performance of debt and equity markets in the country.
