Government total budget deficit 343.

5 billion Karu

Friday, 05 July 2013

'Total of the budget deficit of the government for the first four months of the year is Rupees 343.5 billion' said by MP Karu Jayasooriya at media conference. See full speech below. These days we hear everywhere the sound of the struggle for living. Lamentation of a large number of people who struggle for three square meals a day. We hear this wail from all four corners of the Island. Anger of the people gets aggravated, when they witness a small section of society indulging in extreme comforts, while the down trodden people experience huge pressure under the struggle to make ends meet. This smaller group lives in a dream world of their own wasting public funds, robbing national resources and violating the rules and regulations of the country. They are able to behave in this manner due to the patronage they get from the rulers. With the defeat of terrorism and dawn of peace, people awaited an improvement of their living conditions. With the reduction of war expenditure people expected the money saved to be utilized for development and welfare of the people. What happened was a waste of funds for mega non profitable projects and massive investments started without proper evaluations. Port in Hambantota and International Airport in Mattala, have turned out to be money crunching projects. Waste of corruption is rampant. Minister Dew Gunasekera stated in the presence of the

President" that 4 Institutions are accountable for 95% of the losses of the state sector. He named Petroleum Corporation, Ceylon Electricity Board, Sri Lankan Airlines and Mihin Air as these four institutions. Operational loss of State Institutions according to 2012 Central Bank Report. OPERATIONAL LOSS State Institution Rs.Million Ceylon Electricity Board 61,200 Sri Langama (CTB) 3,820 Sri Lanka Railways 3,790 Sri Lankan Airlines 20,500 Mihin Lanka 1,000 Postal Department Source Annual Report of Central Bank of Sri Lanka 2012 5,000 OF STATE INSTITUTIONS 2012

Ceylon Petroleum Corporation 89,700

Total of the budget deficit of the government for the first four months of the year is Rupees 343.5 billion. According to the latest data of the Ministry of Finance to bridge the deficit maximum amount of Rs.172.6 Billion is obtained from the banking sector. Rs.41.7 Billion from the foreign funds. Contribution from the non banking sector is Rs.65.1Billion. Amount obtained from foreign investments in Treasury Bills is Rs.63.9 Billion. Although the report issued by the Finance Ministry states that the budget deficit during the first four months of the year is 3.9%. Due to the weakening in administration of the economy in the country this figure could be far from the truth. In the face of higher state debts, higher bank foreign debts and widening budget deficit, Moodys Investment Services Institution has down rated the forecast from B1+ to B1-. Moodys Institute shows under the present economic administration there will be an environment where weaknesses in the ability in repayment of loans could emerge. This could cause an additional pressure on external payment procedure. The Central Bank believes, by 2015, there will be a growth rate of 8.3; reduction of current account deficit to 1.4; foreign reserve to exceed 10 billion dollars. The government says foreign direct investments will take the lead in achieving the above. However, Moodys say in the presence of internal policy challenges and global economic trends, it will be a challenge to realize these predictions of the government. They have emphasized in this report, the political instability after the war victory, dissention among races and religions instead of co-existence; retrogression will

reduce foreign investments. In this background there should be immediate financial discipline in the country. However, what is happening is contrary to it. Wasteful government expenditure is increasing. There is no concern for public funds. Irrelevant diplomatic missions are being established in different countries of the world. Relations and close friends are appointed to these missions, not experienced officers of the Foreign Service. Lives are being destroyed due to unprotected Railway Crossings. Since sufficient funds are not given to the Ministry of Health, Cancer patients and other patients are deprived of medical facilities and medicine. It is reported that sufficient dialysis equipment are not available to treat thousands of kidney patients. Schools and Universities do not have required facilities. Student Unions of Kelaniya and Sabaragamuwa Universities point out that at the Kelaniya University, CCTV Cameras are being installed around the arts faculty without providing camera equipment to the students following courses in photography and at Sabaragamuwa University CCTV Cameras are installed without allocating funds for educational facilities. Apart from this, whenever the President travels abroad, he provides development aid to some countries, as done by the leaders of the super rich countries of the world. Although assistance should be given to countries whenever they undergo natural disasters, with our economic background, a waste of national wealth in this manner is an injustice done to the people of our country, from their point of view. For in the end, it is they who have to shoulder this burden. This reminds us of the saying Loketa Parakase, Gederata Maragathe It should be stressed that the authorities should keep in mind that economists have issued warnings that Sri Lanka will have to face a massive economic collapse, if immediate steps are not taken to bring financial discipline to the state sector. Rulers have the right to dream, but we cannot endorse wasting public funds for realization of the dreams.