COLOMBO: Sri Lanka’s government revenue will increase by at least 30 percent in 2015, but the new administration is struggling to repay the massive debts on infrastructure projects incurred by the previous government, Finance Minister Ravi Karunanayake said. Since assuming power after the January 8 presidential elections the government has slowed many infrastructure projects amid allegations of corruption and over-estimation of projects by the previous administration headed by Mahinda Rajapaksa, who has rejected such allegations.
It has also plugged many tax loopholes to boost revenue and cut spending on infrastructure in order to meet an ambitious budget deficit target of 4.4 percent of the gross domestic product (GDP) this year from 6 percent in 2014. “We have basically looked at cutting of unnecessary expenditure,” Karunanayake told a Foreign Correspondents Association forum late on Thursday. “We believe that revenues will go up by at least about 30 percent full-year.”
The government has been borrowing heavily through local treasury bonds and bills as it struggles to pass crucial tax bills announced in an interim budget in January due to lack majority in parliament. The government’s treasury operations department has received some expenditure bills that were not approved by parliament or the previous government’s cabinet of ministers, he said. Karunanayake said the treasury had received 510 billion rupees ($3.81 billion) worth expenditure claim for road projects and 325 billion rupees worth claim for water projects in 2014 alone, both of which were not approved by parliament or the cabinet. The government’s total capital expenditure was 596 billion rupees last year.
