Maheesha Mudugamuwa
The Treasury has issued orders to state institutions to slash expenses as the country is facing an economic crisis following the Easter Sunday attacks. Nevertheless, some sections of the Government continue to splash public funds on political propaganda activities.
In this backdrop, a circular was issued by the Treasury recently to state institutions to cut down expenses by 15%.
Speaking to The Sunday Morning, Ministry of Agriculture, Livestock Development, Irrigation, and Fisheries and Aquatic Resources Development Secretary K.D.S. Ruwanchandra said that the Ministry had already cut down 15% of the capital expenditure, which was around Rs. 7.5 million, from selected areas only.
“There are some issues relating to some projects including the Climate Resilience Improvement Project, Thalpitigala Reservoir Project, and two others. We have cut down funds only from those areas and therefore, it didn’t affect the overall expenditure,” he explained.
Meanwhile, Ministry of Housing, Construction, and Cultural Affairs Secretary Bernard Wasantha stressed that his Ministry was not in a position to cut down their expenditure and that they were currently holding discussions with the Treasury.
“Usually, ministries are not given the total allocations, and when it comes to the Housing Ministry, it’s difficult to cut down expenses as all the funds have already been spent on development projects. Unlike some other ministries which are not utilising the total allocated funds, the Housing Ministry utilises 100% of it,” Wasantha claimed.
Whilst attention was focused on capital expenditure, the expenses for promotional activities for the special programmes launched by the Government were also highlighted. Among them were the recently concluded exhibition “Shilpa Sena” organised by the Ministry of Science, Technology, and Research, “Gamperaliya”, and “Enterprise Sri Lanka”.
Speaking to The Sunday Morning, Minister of Science, Technology, and Research Sujeewa Senasinghe noted that the budget for “Shilpa Sena” was one of the smallest ever for such a project in Sri Lanka.
“The total cost of the exhibition, including infrastructure expenses, was around Rs. 30 million, and we are planning to hold it in five districts. Due to the very limited budgetary allocations, the Ministry will seek the support of the private sector for the upcoming exhibitions,” Senasinghe noted.
Usually, a programme like this costs around Rs. 500 million to Rs. 600 million, but the Ministry managed to carry it out with only Rs. 30 million, attracting over 700,000 people, he claimed.
However, when asked whether his Ministry had cut down capital expenditure as requested by the Treasury, the Minister stressed that his Ministry was not informed of this.
The Sunday Morning also contacted Secretary to the Prime Minister Saman Ekanayake to verify if the Prime Minister’s Office was also affected by the expenditure cuts. He said the circular did not affect the Prime Minister’s Office.
Political propaganda
A few years ago, the topic of excessive government expenditure was in the limelight, with allegations levelled against the former administration on spending higher amounts of taxpayers’ money for political campaigns.
Soon after President Maithripala Sirisena came into power in 2015, certain instructions were given to the government ministers and institutions to not waste money on advertising. He also ordered the removal of all his cut-outs and posters. But currently, a flurry of government ads spruiking the Government’s development plans have hit television, radio, and social media platforms.
Civil rights activists claimed that the Government should first cut down spending enormous amounts on mere government-funded ads before they cut down the capital expenditure of state institutions.
They further claimed that all those ads involved taxpayers’ money, which should be used judiciously, keeping in view the welfare of the people.
Speaking to The Sunday Morning, People’s Action for Free and Fair Elections (PAFFREL) Executive Director Rohana Hettiarachchi said: “Some of these politicians are now preparing for the upcoming election. The Government is now asking the people to cut down their expenses, but they are not cutting down their own expenses and this is unacceptable. They are not using their own money but the taxpayers’.”
Highlighting that it was the duty of all public representatives to develop the country and launch welfare activities for the people, Hettiarachchi stressed that the citizens of this country should understand this truth: “It is their duty and they don’t need to put their names and pictures for those projects,” he noted. But on the other hand, the ministry secretaries defend the promotional activities claiming they were not illegal as they were trying to notify and inform the people about the facilities provided by the Government.
“Around 5% of the total cost of each project was allocated for administration work, and promotional activities are conducted with such allocations,” said Ministry of Housing Secretary Wasantha. While Secretary Ruwanchandra said his Ministry had not spent funds for promotional activities, another senior government official said the promotional activities should be conducted only for the purpose of giving publicity to the development projects.
Meanwhile, the Government received parliamentary approval for several supplementary estimates for government expenditure.
Among these proposed expenditures were funds marked for the purchase of luxury vehicles for several VIPs, including a bulletproof vehicle for former President and Opposition Leader Mahinda Rajapaksa.
Bleeding economy
Explaining the country’s economic situation and the possible reasons for cutting down government expenditure, Central Bank of Sri Lanka (CBSL) former Governor Ajith Nivard Cabraal said that the Government had no option but to cut down government expenditure as total revenues had come down drastically, notwithstanding the fact that the Government had also increased the tax rates.
“If you take the figures of the Government, all the tax revenues have come down, which is not unexpected mainly because the economic activities slowed down. What happens when economic activities slow down is income and VAT comes down, net income of the people comes down, and government income drops because taxes are dropping. The interest rates are now shooting their expenditure high up. Interest is the single biggest cost of the Government. When the interest goes up, the single biggest cost goes up by huge sums. That too has happened and the gap has now increased, so the Government’s need to borrow has also increased,” Cabral stressed.
The Treasury has issued orders to state institutions to slash expenses as the country is facing an economic crisis following the Easter Sunday attacks. Nevertheless, some sections of the Government continue to splash public funds on political propaganda activities.
In this backdrop, a circular was issued by the Treasury recently to state institutions to cut down expenses by 15%.
Speaking to The Sunday Morning, Ministry of Agriculture, Livestock Development, Irrigation, and Fisheries and Aquatic Resources Development Secretary K.D.S. Ruwanchandra said that the Ministry had already cut down 15% of the capital expenditure, which was around Rs. 7.5 million, from selected areas only.
“There are some issues relating to some projects including the Climate Resilience Improvement Project, Thalpitigala Reservoir Project, and two others. We have cut down funds only from those areas and therefore, it didn’t affect the overall expenditure,” he explained.
Meanwhile, Ministry of Housing, Construction, and Cultural Affairs Secretary Bernard Wasantha stressed that his Ministry was not in a position to cut down their expenditure and that they were currently holding discussions with the Treasury.
“Usually, ministries are not given the total allocations, and when it comes to the Housing Ministry, it’s difficult to cut down expenses as all the funds have already been spent on development projects. Unlike some other ministries which are not utilising the total allocated funds, the Housing Ministry utilises 100% of it,” Wasantha claimed.
Whilst attention was focused on capital expenditure, the expenses for promotional activities for the special programmes launched by the Government were also highlighted. Among them were the recently concluded exhibition “Shilpa Sena” organised by the Ministry of Science, Technology, and Research, “Gamperaliya”, and “Enterprise Sri Lanka”.
Speaking to The Sunday Morning, Minister of Science, Technology, and Research Sujeewa Senasinghe noted that the budget for “Shilpa Sena” was one of the smallest ever for such a project in Sri Lanka.
“The total cost of the exhibition, including infrastructure expenses, was around Rs. 30 million, and we are planning to hold it in five districts. Due to the very limited budgetary allocations, the Ministry will seek the support of the private sector for the upcoming exhibitions,” Senasinghe noted.
Usually, a programme like this costs around Rs. 500 million to Rs. 600 million, but the Ministry managed to carry it out with only Rs. 30 million, attracting over 700,000 people, he claimed.
However, when asked whether his Ministry had cut down capital expenditure as requested by the Treasury, the Minister stressed that his Ministry was not informed of this.
The Sunday Morning also contacted Secretary to the Prime Minister Saman Ekanayake to verify if the Prime Minister’s Office was also affected by the expenditure cuts. He said the circular did not affect the Prime Minister’s Office.
Political propaganda
A few years ago, the topic of excessive government expenditure was in the limelight, with allegations levelled against the former administration on spending higher amounts of taxpayers’ money for political campaigns.
Soon after President Maithripala Sirisena came into power in 2015, certain instructions were given to the government ministers and institutions to not waste money on advertising. He also ordered the removal of all his cut-outs and posters. But currently, a flurry of government ads spruiking the Government’s development plans have hit television, radio, and social media platforms.
Civil rights activists claimed that the Government should first cut down spending enormous amounts on mere government-funded ads before they cut down the capital expenditure of state institutions.
They further claimed that all those ads involved taxpayers’ money, which should be used judiciously, keeping in view the welfare of the people.
Speaking to The Sunday Morning, People’s Action for Free and Fair Elections (PAFFREL) Executive Director Rohana Hettiarachchi said: “Some of these politicians are now preparing for the upcoming election. The Government is now asking the people to cut down their expenses, but they are not cutting down their own expenses and this is unacceptable. They are not using their own money but the taxpayers’.”
Highlighting that it was the duty of all public representatives to develop the country and launch welfare activities for the people, Hettiarachchi stressed that the citizens of this country should understand this truth: “It is their duty and they don’t need to put their names and pictures for those projects,” he noted. But on the other hand, the ministry secretaries defend the promotional activities claiming they were not illegal as they were trying to notify and inform the people about the facilities provided by the Government.
“Around 5% of the total cost of each project was allocated for administration work, and promotional activities are conducted with such allocations,” said Ministry of Housing Secretary Wasantha. While Secretary Ruwanchandra said his Ministry had not spent funds for promotional activities, another senior government official said the promotional activities should be conducted only for the purpose of giving publicity to the development projects.
Meanwhile, the Government received parliamentary approval for several supplementary estimates for government expenditure.
Among these proposed expenditures were funds marked for the purchase of luxury vehicles for several VIPs, including a bulletproof vehicle for former President and Opposition Leader Mahinda Rajapaksa.
Bleeding economy
Explaining the country’s economic situation and the possible reasons for cutting down government expenditure, Central Bank of Sri Lanka (CBSL) former Governor Ajith Nivard Cabraal said that the Government had no option but to cut down government expenditure as total revenues had come down drastically, notwithstanding the fact that the Government had also increased the tax rates.
“If you take the figures of the Government, all the tax revenues have come down, which is not unexpected mainly because the economic activities slowed down. What happens when economic activities slow down is income and VAT comes down, net income of the people comes down, and government income drops because taxes are dropping. The interest rates are now shooting their expenditure high up. Interest is the single biggest cost of the Government. When the interest goes up, the single biggest cost goes up by huge sums. That too has happened and the gap has now increased, so the Government’s need to borrow has also increased,” Cabral stressed.