Oct 07, Colombo: Sri Lanka is aiming to reduce the budget deficit at 6.2 percent of GDP while maintaining an 8 percent economic growth and an annual inflation between 6 and 7 percent in the 2012 budget.
The government says it has given priority to complete the ongoing development activities, before allocating resources for new projects in the budget proposals for 2012.
The forthcoming budget will provide salary increases to the public servants and 300,000 employment opportunities in the Public Service, the Minister of Mass Media and Information Keheliya Rambukwella told media at the Cabinet press briefing today.
The Sri Lankan cabinet has yesterday approved the government to present its US$ 20 billion budget for 2012 in the parliament for debate on November 21.
The cabinet which met Thursday for its regular meeting has granted approval to a proposal submitted by the President in his capacity as the Finance Minister to present the Appropriation Bill for the Financial Year 2012 in parliament after publishing it in the Government Gazette.
The first reading of the Appropriation Bill will be on Oct 18th and the presentation of the Budget in Parliament (2nd Reading) will be on Nov 21, the cabinet has announced.
During the preparation of the budget the President and the General Treasury met with officials of various ministries and leaders and representatives of various industrial sectors in the country soliciting their views and suggestions.
Each Ministry has been consulted with a “view to formulating a realistic budget to divert resources for priority areas identified in the Mahinda Chinthana and phased out in the Medium Term Expenditure Frame Work 2012 2014.”
According to the government, the total expenditure for 2012 is estimated at Rs. 2.22 trillion (US$ 20 billion) necessitating an increase in Recurrent Expenditure from Rs.1. 029 trillion in 2011 to Rs.1.109 trillion in 2012, and the Capital Expenditure from Rs.938 billion to Rs.1.111 trillion. The total revenue will be Rs 1.115 trillion.
Public Investment has increased from Rs.453 billion in 2011 to Rs.541 billion in 2012 in order to maintain the momentum in the growth rate of 8 percent, the government said.
Although Sri Lanka has shown strong improvement in fiscal performance, the International Monetary Foundation (IMF) last year advised Sri Lanka to take forceful action to reduce the budget deficit and public debt.