Sri Lanka state finances busted, Rs118bn printed

April 08, 2009 (LBO) – Sri Lanka’s government finances had been busted in 2008 with revenues 95 billion rupees below target, 118 billion rupees being printed by the central bank, while foreign financing turned negative, the latest official data show. In recent years it has become the practice in Sri Lanka to present fairy tale revenue numbers to the parliament in the budget, and oairy fairy out-turn numbers with the next year’s budget for parliamentary consumption.

Hard reality hits the public only later. It is usual to over-estimate revenue, under-estimated current expenditure and show impressive expenditure allocations.

Fairy Tale

In the 2008 budget, Sri Lanka originally projected revenues of 750.7 billion rupees, current expenditure of 712.8 billion rupees and capital expenditure of 331.2 billion rupees.

In November, with only one month to go ,the revised out-turn was presented to Sri Lanka’s gullible lawmakers as 709 billion rupees of revenue, 743.3 billion in current expenditure and 278.1 billion as capital expenditure.

The provisional data released in the central bank annual report now show that the finance ministry has only raised 655.2 billion rupees in revenue (95.5 billion rupees below target) and current ex