Twenty percent of the ministries or the 11 biggest ones, including ones for defense, finance and nation building coming under the president, has been given 750 billion rupees out of the total 925 billion rupees planned to be spend next year.

Meanwhile more than half the ministries would get less than one percent of the total expenditure, according to an appropriation bill presented to parliament last month.

“In the last two years there was a trend where resources were concentrated around the head of state and a few ministries which come under him,” says Muttukrishna Sarvananthan who heads the Point Pedro Institute of Development.

Sri Lanka has 57 ministries overlooked by 108 cabinet ministers, non cabinet ministers and deputies, which critics have said is one of the highest concentrations of ministers in the world.

Below a Billion

Forty four ministries, or 80 percent, will have annual budgets lower than 9.25 billion rupees which is one percent of proposed spending.

“For name sake there are ministries and deputy ministries created for giving power to various coalition partners”, says Sarvananthan, referring to the nine party coalition led by the President Mahinda Rajapakse's Sri Lanka Freedom Party.

The Public Estate Management and Development Ministry is the poorest with its miserly 79 million rupee allocation or 0.0085 percent of next year's spending.

About 15 million rupees of that is for capital expenditure while the 64 million rupees in recurrent funding will be used to manage the offices of Minister Milroy Fernando with his deputy Susantha Punchinilame.

The smallest 30 percent of ministries, like the one for public estate management, get less than 0.1 percent of next years budget each according to an analysis of proposed spending on ETV’s Lanka Business Report, a weekly business show.

The thirty percent or made up by 17 ministries, which on average have two ministers and deputy ministers, will get funding of 925 million rupees each, which is one thousandth of proposed spending.

Ministries usually exhaust and seek supplementary funds for recurrent spending which is usually transferred out of the proposed capital spending budget.

This year supplementary estimates of 61.8 billion rupees which increases this years planned spending by 7.4 percent was presented to parliament to fund extra expenditure on salaries, subsidies and security.

According to the Appropriations bill presented to parliament last month 418 billion rupees or 45 percent of total spending will be for investment.

Sri Lankan ministers are a costly lot to maintain.

They are entitled to hire many staff, they use multiple vehicles including ones borrowed from departments under their charge spending millions of rupees on fuel annually.

They also take numerous expensive trips abroad sometimes taking family and friends along and rent million rupee residences.

In addition they and a few of their personal staff get pensions after five years. As a result some ministers hire their wives on to their personal staff, setting up the family for life at the expense of ordinary people.

President's Power

“We see resources concentrated amongst a few ministries particularly with the president himself," says Sarvananthan, who used to be based in the northern Jaffna peninsular before escalating violence forced him to shift operations to Colombo.

"So the number of ministries does not seem to tally with the resources. In that respect there is no decentralization of financial resources.”

In addition to the Defense ministry which accounts for nearly a fifth of planned spending President Rajapaksa controls the powerful Finance and Nation Building ministries as well.

Including allocations for the president’s office President Rajapaksa will directly control 323 billion rupees or 35 percent of next year's budget which is 5 percent higher than the 29 percent he controls this year.

“It’s not a matter of funds being misused or not here but it’s a matter a principle,” argues Sarvananthan.

“A president is not answerable to parliament so there is a conflict of interest because the constitution says parliament is supreme on public finance.

“So there is a moral and ethical issue when a person not answerable to parliament and who is above the law controls so much of the budget.”

Prudence Overlooked

Over the past few years fiscal discipline has deteriorated. Increasingly larger amounts of money is being spent on salaries of the government sector, with 57 cents out of every tax rupee go to former and current state employees in the first five months of the year.

As a result a large part of the budget has to be financed out of borrowings or worse printed money.

The finance ministry frequently dips in to the Central Bank either to print money or appropriate foreign reserves, driving inflation up and the rupee down.

The 2006 budget pushed inflation to 20 percent. The 2007 budget has pushed inflation up to 17.3 percent so far with the promise of a surplus current budget being broken already.

“In general terms fiscal prudence has given away to fiscal expansionism in the past few years,” says Sarvananthan.

President Mahinda Rajapaksa, who is also the finance minister will tell parliament on the November 07, through the 2008 budget proposals how the latest spending plans will be financed.

The president, who is also the finance minister, doesn’t attend the budget debate.