July 02, 2012 (LBO) – Sri Lanka’s budget deficit has doubled in the first four months of 2012, with current spending growing at twice the rate of tax revenues and leading to unprecedented reliance on bank financing, official data show. Total revenues grew 7.2 percent to 305.5 billion rupees up to April 2012 from a year earlier, while current spending raced ahead at 23.4 percent to 445.3 billion rupees with fertilizer subsidies doubling, a mid-year fiscal report said.
Interest expenses had shot up to 173.6 billion rupees from 142.2 billion rupees.
A fertilizer subsidy had more than doubled to 13.0 billion rupees 5.6 billion rupees, in the first four months from with rulers deciding to handouts from the tax-payer to sectors which could previously stand on their own feet.
Tax revenues grew 10.7 percent to 276.4 billion rupees and non-tax revenues fell 17.5 percent from a year earlier to 29.0 billion rupees.
The revenue deficit or the gap between total revenues and current expenses rose 86 percent to 139.8 billion rupees equal to 1.8 percent of projected gross domestic product, when an ambitious budget had projected a balancing of the current budget.
The budget for 2012 hoped to extract