Budget 2021 to be tabled in Parliament on Nov. 17

The government’s budget for the year 2021 is scheduled to be presented to the Parliament on the 17th of November this year.

State Minister of Finance and Capital Market and Public Enterprise Reforms  Ajith Nivaard Cabraal announced this during a media briefing at the Ministry of Finance today (30).

He noted that the government expects to ensure that the consolidation of the fiscal deficit is brought down to a level of about 4 per cent in the next few years. “This year was a tough year. We had to make payments of around 2 per cent pertaining to the previous year’s unpaid bills. But we thought we should settle that in order to spur economic activity once again and the government took a conscious call to do that, even though it would mean that the fiscal deficit might increase to some extent.” 

The COVID-19 management also had to be managed with some with some additional funds which against calls some stress to the fiscal deficit. But that would not be there next year, he said adding that the government expects to begin the consolidation process from 2021 onwards and it will be announced in the budget.

The budget will contain measures that will be taken to consolidate the fiscal deficit while at the same time introduce measures to improve the Sri Lanka’s growth story and to take the economy forward. “As you know a six and a half per cent growth has been targeted. We are not moving away from that. We want to maintain that as our overall aim.”

Meanwhile, speaking on the Moody’s rating downgrade on Monday (28), he said it has failed to recognize and to do justice to the ground reality of the ongoing rapid economic recovery that has been backed by a vastly improved business confidence arising from the return of political and policy stability after a lapse of five years.

The world has recognized Sri Lanka’s successful efforts to control the spread of the virus, he said adding that “Sri Lanka has done excellently well in the containment as well as in the way that we have handled the COVID-19 pandemic.

Sri Lanka recently ranked second in terms of COVID-19 epidemic prevention measures, economic recovery and international cooperation out of 108 countries surveyed by the Yicai Research Institute, part of China’s largest financial media group Yicai Media Group.

The exchange rate has appreciated sharply since mid April and remains stable at appreciated levels allowing the Central Bank of Sri Lanka (CBSL) to accumulate reserves through market purchases of foreign exchange, the State Minister said further. From May onwards, the CBSL has been purchasing foreign currency to maintain the exchange rate at current levels, he said adding that from May to August, Sri Lanka has had a improvement in its reserve position, he added.

A Vote on Account for government expenses from September 01 this year was meanwhile passed in Parliament without a vote on the 28th of August.

The Vote on Account sought the approval of the Members of the Parliament for a sum not exceeding Rs. 1,300 billion for the period from September 01 until the budget for 2020 is passed.