October 5, 2006 (LBO) â€“ Sri Lanka plans to spend more and borrow further next year as expenses for defence hardware and fuel related subsidies escalate. Total state spending will climb 42 percent to 804.6 billion rupees from 568.3 billion rupees in 2006, the government said Thursday while tabling the 2007 budget appropriation bill before legislators.
Military spending is due to rise 45 percent to 139.55 billion rupees next year from an estimate of 96.21 billion rupees in 2006.
The military’s capital spending, which reflects purchases of weapons and other equipment, jumped almost three-fold with the army, navy and the air force budgets leaping while police capital spending showed a decline.
Overall borrowing programme will expand by nearly 30 percent to 694.7 billion rupees, as authorities leans further on foreign debt, rupee loans and government bonds. The programme excludes Rs. 300 billion ceiling set for borrowings through treasury bills.
The appropriation bill does not include revenue estimates, but President Mahinda Rajapakse, who is also the countryâ€™s finance minister, will disclose the details in his November 17 budget.
Sri Lanka is hoping to contain its budget deficit to eight percent, Treasury Secretary P B Jayasundara said. (US$ 1 = Rs. 104)