Finance Minister proposes to increase borrowing limit in Appropriation Bill by Rs.180bn

Nov 12, 2020 (LBO) – Sri Lanka’s Finance Minister Mahinda Rajapaksa on Thursday proposed to increase the borrowing limit stated in the Appropriation Bill by 180 billion rupees and to amend the guarantee limit to 15 percent as stated in the Fiscal Management (Responsibility) Act.

Delivering the budget speech for 2020, Premier Rajapaksa said that several expenditure heads included in the Appropriation Bill will also be amended.

“The policy of our government as stated in the budget is to change the disastrous socio economic path that the country has embarked on, in the last five years. If the country is to achieve economic independence then it is mandatory that we change course,” he said.

“It is the responsibility of our government to reduce the income-expenditure gap to 4 percent of GDP by 2025 which now stands at nearly 10 percent and to reduce the overall debt to GDP to 75 percent of GDP within the next 4 years.”

From 2020 onwards annually, foreign debt servicing amounts to approximately 4,200 million US dollars.

“I am happy to report to this House that we have settled all debt obligations including the foreign currency debt dues for the year 2020,”

“We were able to maintain this unblemished record of ours, only because we took immediate action to reduce unwanted foreign borrowings and made substantial effort to manage imports at an acceptable level, as we had a clear understanding that the debt phobia is being propagated simply as a strategy to justify the sale of assets of the country and the neo liberal policies of the last government.”

The Finance Minister will present the proposals to create a modern economy through “Vistas of Prosperity” to the Parliament, through the budget speech 2021 on 17 November 2020.

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