Recurrent expenditure is set to increase surpassing the budgetary estimate of Rs.1.4 trillion for 2019 as the government has already spent around Rs. 1.13 trillion so far making it difficult for the Treasury to meet these expenses after next month, state financial analysts have said.
Total revenue continues its declining trend with first six months earnings of around Rs. 898 billion lower than expectations, provisional data of the Treasury showed.
Levy and dividend income of 38 state-owned enterprises (SOEs) out of 55 SOEs has not been credited to the Treasury during the period under review, Finance Ministry statistics revealed.
Revenue from the profit, levy and dividends of the SOEs was around Rs. 4.8 billion in the first six months this year compared to around Rs 21 billion in the same period last year.
The expenditure on salaries and wages of public servants including Provincial Councils increased by 3.9 per cent in the first six months of 2019 as against Rs. 327 billion in the same period of 2018.
The pension payment was Rs. 112 billion, an increase of 17.8 per cent compared to the same period of 2018.
Revenue from Customs duty has dropped also from the targeted 20 per cent increase.
State Minister of Finance Eran Wickramaratne told the Business Times that there was a decline in Custom duty collection which will impact the state revenue already affected by Easter terror attacks and 52-day political impasse.
Revenue from Customs was 30 per cent below target in the first five months of 2019; he said adding that this would be increased in the next few months hopefully as the department has the capacity to release 1,500 containers per day.
Revenue collection is expected to improve in the next four months, Treasury Secretary Dr. R.H.S Samaratunge disclosed on the sidelines of a media conference in Colombo on Monday adding that state spending will be curtailed to meet expenses.
The Treasury will be re-assessing the 4.4 per cent 2019 budget target in the face of high expenditure and decline in revenue; he said adding that the balance of payment issue will have to be handled accordingly.
He noted that discussions are underway with China in an effort to meet unprecedented foreign debt obligations but raising US$ 250 million through panda bonds is still doubtful.