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Oct 02, 2012 (LBO) - An interim report on state finances presented to parliament is not responsive to Sri Lanka's fiscal management responsibility law and lacks key information, a legislator has said.
Harsha de Silva, an opposition legislator who is an economist, has told parliament that in Sri Lanka's mid-year fiscal report covering fiscal operations of the first four months, only cash flows were presented according to the law.
Sri Lanka's Fiscal Management Responsibility Law was brought to parliament in a bid to check runaway state expenditure and stabilize the economy.
Sri Lanka's large budget deficits and an ever expanding public sector have pushed up interest rates and the national debt, while slowing growth.
At the time the law was brought, the country had a national debt of over 100 percent of estimated gross domestic product. It has since fallen to about 80 percent of GDP.
The law was aimed at bringing the budget deficit down to 5.0 percent of gross domestic product by 2006, a goal that the country is yet to reach.
De Silva said the law required the finance ministry to present to parliament estimates of taxes and the actual taxes collected and the estimated expenses and the actual expenses for the four months, but it had not been done.
Only government cashflows were presented according to the law.
Sri Lanka's state finances suddenly go off the rails, especially when oil prices spike, as the state forgoes energy taxes to manipulate tariffs.
When the revenue shortfalls are accommodated with central bank credit (printed money) Sri Lanka runs into balance of payments crises.
Section 12, of the fiscal management law requires the report to contain:
(a) a statement of the estimated and actual expenditure for the first four months of that year ;
(b) a statement of the estimated and actual revenue for the first four months of that year ;
(c) a statement of the estimated and actual cash flows for the first four months of that year ;
(d) a statement of the estimated and actual borrowings for the first four months of that year
Civil activists and some legislators have also tried to enact a right to information law, which the current administration has so far resisted.
http://www.lbo.lk/fullstory.php?nid=1606825418
Harsha de Silva, an opposition legislator who is an economist, has told parliament that in Sri Lanka's mid-year fiscal report covering fiscal operations of the first four months, only cash flows were presented according to the law.
Sri Lanka's Fiscal Management Responsibility Law was brought to parliament in a bid to check runaway state expenditure and stabilize the economy.
Sri Lanka's large budget deficits and an ever expanding public sector have pushed up interest rates and the national debt, while slowing growth.
At the time the law was brought, the country had a national debt of over 100 percent of estimated gross domestic product. It has since fallen to about 80 percent of GDP.
The law was aimed at bringing the budget deficit down to 5.0 percent of gross domestic product by 2006, a goal that the country is yet to reach.
De Silva said the law required the finance ministry to present to parliament estimates of taxes and the actual taxes collected and the estimated expenses and the actual expenses for the four months, but it had not been done.
Only government cashflows were presented according to the law.
Sri Lanka's state finances suddenly go off the rails, especially when oil prices spike, as the state forgoes energy taxes to manipulate tariffs.
When the revenue shortfalls are accommodated with central bank credit (printed money) Sri Lanka runs into balance of payments crises.
Section 12, of the fiscal management law requires the report to contain:
(a) a statement of the estimated and actual expenditure for the first four months of that year ;
(b) a statement of the estimated and actual revenue for the first four months of that year ;
(c) a statement of the estimated and actual cash flows for the first four months of that year ;
(d) a statement of the estimated and actual borrowings for the first four months of that year
Civil activists and some legislators have also tried to enact a right to information law, which the current administration has so far resisted.
http://www.lbo.lk/fullstory.php?nid=1606825418
