Crisis-hit Sri Lanka’s interim budget targets ambitious revenue and debt reduction targets


ECONOMYNEXT – A new mechanism for finding eligible social assistance recipients in Sri Lanka will see better targeted social assistance programs and cash transfers that will be made directly to beneficiaries’ Bank accounts, said President Ranil Wickremesinghe.

Presenting a provisional budget for the rest of the year, Wickremesinghe told parliament on Tuesday August 30 that the new mechanism, once completed, will also ensure that transparent laws and systems are in place.

Sri Lanka is going through its worst economic crisis in 74 years of independence, and the public is facing immense hardship due to rising prices and shortages of a number of goods. Amid a crippling foreign exchange shortage, the island nation has had to default on its foreign debt and much-needed but politically unpopular economic reforms, including spending cuts, are already underway which will add to the hardships of the people. short term.

“I am well aware of the difficulties faced by many due to the current crisis. That is why I decided to cut some capital expenditure and find room for provide better support to vulnerable communities,” said President Wickremesinghe.

He noted that between May and July 2022, the government had spent Rs 31 billion on a monthly stipend in emergency aid to those affected due to job loss, decline in agriculture or inability to cultivate.

“I propose to continue this program for another one four month to reduce the pressure of the economic crisis [on those people],” he said.

Other social measures include 2,500 rupees in addition to the 20,000 rupees already given to pregnant women, and 10,000 rupees to be allocated per family to 61,000 food insecure families in need of urgent assistance. Some Rs 46.6 billion has been allocated for these measures, according to the interim budget document.

As previously announced by Energy Minister Kanchana Wijesekara, direct cash transfers will be made to workers in the fishing and plantation sectors who are affected by a recent rise in kerosene prices.

Meanwhile, Rs 133 billion has been allocated under a loan from the World Bank and approval was secured through the supplementary estimate presented before the reading of the draft budget to provide immediate relief to approximately 3.2 million people affected by the current economic situation.

Under this, the President said, the monthly Samurdhi allowance has been increased to an amount between Rs 5,000 and Rs 7,500 per month for about 1.7 million currently Samurdhi families. Apart from this, Rs 5,000 was provided temporarily per month to around 726,000 families who were on a waiting list to wait for Samurdhi benefits.

An allowance for elderly, disabled and kidney patients in Sri Lanka has also been increased to Rs.

In addition to the above concessions provided under this project, US$110 million (Rs 40 billion) has been allocated for the import of urea required for paddy cultivation during the ‘Maha ‘ 2022/2023, and fertilizer production is already underway, said The President.

“I believe this will enable rice farmers to get a good harvest in the next season and we can get rice at a reasonable price for consumers,” he said.

“Under the same loan facility, domestic cooking gas was imported and distributed in the country for a short period to overcome the shortage of domestic gas that had occurred due to the current foreign exchange shortage. In addition, we strive to meet domestic gas needs without shortages in the future as well. It is planned to spend about 70 million US dollars (25 billion rupees) of this aid in the form of a loan for this. (Colombo/August 30, 2022) (After…)

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