Sri Lanka clamps down on last minute spending

Ishara S. Kodikara | AFP | Getty Images Sri Lanka Prime Minister Ranil Wickremesinghe, center, speaks to supporters at the prime minister's official residence in Colombo on December 16, 2018, after he was reappointed as prime minister by Sri Lanka's president, the same man who fired him from the job nearly two months ago.

Nov 26, 2008 (LBO) – Sri Lanka has clamped down on new spending, with the Treasury asking government departments to freeze new capital projects and current spending till next year, amidst tight revenues. The government has also been finding it difficult to borrow abroad.

A Treasury circular said the government had decided to “manage public expenditure very strictly during the balance period of 2008,” as duty cuts were hurting revenue while defence and fertilizer subsidy costs were rising.

The instructions were issued to ministries, provincial councils, government enterprises and statutory entities, by Sri Lanka’s new Treasury Secretary Sumith Abeysinghe, a senior official who had put in long years in the finance ministry.

The circular had been issued this month to curb a tendency by ministries to quickly spend any unspent money at the last minute, an official said.

The circular instructed officials to “freeze with immediate effect” all supplies and services which were not committed, and to “to stop all constructions” which have not started yet and stop purchase of capital goods, machinery and vehicles.

It also asked officials not to create new current expenditures and defer “all