Aug 07, 2008 (LBO) – Sri Lanka has decided to spend at extra 25 billion rupees (230 million US dollars) on a politically important fertilizer subsidy, a senior minister said, as the country is seeking commercial funding for vital infrastructure projects. In the fiscal budget for 2008, Sri Lanka allocated 15 billion rupees for fertilizer subsidies, but the finance ministry said in an interim fiscal report that all the money has been busted in just five months.
“The price of fertilizer has increased in the last few months due to the increase of the oil price,” agriculture minister Maithripala Sirisena said.
“So the estimated provision in the last year™s budget was not sufficient for this year™s fertilizer subsidy.”
The extra money will push total spending on the fertilizer subsidy to 40 billion rupees (368 million US dollars) underscoring the political priorities of using national resources in an island where infrastructure is weak and people are poor.
Minister Sirisena announced no new measures to raise the extra money needed for the subsidy, also a chronic fiscal problem in the island.
Though politicians oppose even small increases in sales taxes – only last month President Mahinda Rajapaksa persuaded a provincial governmen