Government May Borrow More!
- To cover stunning expenses in Appropriation Bill 2012
Next year, the Government plans to spend Rs. 2.22 trillion for capital and recurrent expenditure, according to the Appropriation Bill 2012, which was recently submitted to Parliament.
Compared with 2011, the Government has increased the recurrent expenditure by Rs. 80 billion from Rs.1,029 billion to Rs.1,109 billion. Allocation for capital expenditure has also been increased by Rs.173 billion from Rs. 938 billion this year to Rs. Rs.1,111 billion in 2012.
These increased Government spending can only be met with heavy local and foreign borrowings. Some of the allocations in the Appropriation Bill 2012 are given below. According to these allocations certain second tier Ministries are also allocated large amounts of money compared to the Health and Education sectors. The Urban Development Authority (UDA) that functioned separately before November 2010 is now a part of the Ministry of Defence, which comes under the direct purview of President Mahinda Rajapaksa and his brother Gotabhaya Rajapaksa, the Secretary of the Ministry that will enjoy the highest allocation of Rs. 230 billion.
It is also reported that allocation for the Ministry of Economic Development headed by Minister Basil Rajapaksa will exceed Rs. 104 billion compared to Rs.75 billion in 2011. A steep rise is also noted in the allocation made to the Ministry of Finance and Planning, which is also headed by President Rajapaksa – Rs. 124 billion for 2012 from the Rs. 72.5 allocated in 2011.
According to Parliament sources, the debate on the second reading will begin on November 22 and will continue for seven days followed by a vote scheduled for November 30, 2011.
Although the Appropriation Bill was presented last week, the committee stage debate will only be held in December for 17 days and the vote on the third reading will take place on December 21. President Mahinda Rajapaksa as Minister of Finance and Planning will deliver the budget proposals to Parliament on November 21 unveiling plans on how he intends to bridge the budget deficit and raise funds to meet the increased expenses on par with the Mahinda Chinthana that has promised abundance but fell short on delivery in most cases.
Defense Ministry Takes The Lion’s Share
Among the 55 key categories used to allocate funds in the Appropriation Bill enabling the respective organizations to meet the recurrent and capital expenditure in coming year, the Ministry of Defence and Urban Development is at the forefront in terms of the quantity of money that it will disburse in 2012. Although the 30 year fight against separatism came to an end a few years ago, the United People’s Freedom Alliance Government has allocated approximately Rs. 230 billion for next year, compared to Rs. 215 billion the Ministry received in 2011. This is an increase of over 5 per cent.
There are ten state institutions directly listed under the Ministry of Defence and Urban Development. These include the Ministry itself, Army, Navy, Air Force, Police, Department of Immigration and Emigration, Department of Registration of Persons, Department of Coast Conservation, Department of Civil Security and Department of Sri Lanka Coast Guard. From the entire list of institutions, the Sri Lanka Army will receive Rs. 111.78 billion for recurrent expenditure and Rs. 1.4 billion for capital expenditure.
Despite heavy concerns, the Government has maintained its position highlighting the facts to maintain high defence spending. In most cases it is reported that these money will be used to maintain an army over 200,000 using state-of-the-art weaponry and training in addition to debt servicing or the repayment of hefty installments for military hardware obtained to uphold the fight against terrorism. Sri Lanka’s war against terrorism happens to be Asia’s longest running ethnic conflict that claimed over 100,000 lives during the past three decades.