Copied as received on WhatsApp... origin unknown. However, the second part is what I read recently on The Sunday Times....
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The debt ceiling for 2023 was stipulated as Rs 4979 billion . However, seven months into 2023, the government has decided to increase the debt ceiling by a whopping Rs 9000 billion.
This is a 280% increase in local debt for the year 2023. The economy contracted by 11.5% in the first Q of 2023. There have been no foreign debt repayments yet. Industrial growth declined by 32%. Then, the billion dollar question is, what is this extra Rs 9000 billion debt for ? The budget for the cancelled local government elections was only Rs 10 billion, and it was indefinitely postponed, citing a lack of funds . Speculation is rife that there will be a splurge of funds for vanity , eye candy projects before an election, which will put the country in another debt spiral, which a new government will have to bear the brunt of.
In Sri Lankan politics, there are no losers only winners . Losing an election is as good or even better than winning . In the run-up to the elections, those in power use government funds running into billions for election targeted projects from which tons of money is earned through kick backs and commissions.When the final results are announced, whether the result goes in their favour or not, matters little as the coffers have been emptied. Safe to say this whopping extra Rs 9000 billion is going to be wiped clean by Ranil Rajapaksa and his gang.
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From The Sunday Times, last week.
The Government is seeking parliamentary approval to increase the borrowing limit by as much as Rs 9,000 billion to finance public expenses through an amendment to the Appropriation Act.
The latest debt ceiling increase will enable the Government to cover debt service payments, recurring expenses, and welfare expenses through domestic borrowings since it lost access to the international market to raise funds.
A bill was ordered to be published by President Ranil Wickremesinghe on Wednesday in his capacity as Minister of Finance, Economic Stabilisation and National Policies to increase the debt ceiling from the current Rs 4,979 billion to Rs 13,979 billion.
Since Parliament is vested with powers regarding public finance, its approval is sought to increase service expenditure and capital expenditure of the Treasury operations by amending the Appropriation Act No. 43 of 2022.
The latest move to increase public expenditure came days after the Government had carried out a Domestic Debt Optimisation (DDO) initiative under an International Monetary Fund (IMF) programme to meet debt sustainability targets agreed upon with the global lender.
Last June, a resolution was passed in the House without a debate to increase the previous debt ceiling of Rs. 3000 billion by another Rs 1,000 billion under the Local Treasury Bills Ordinance. Then Prime Minister Wickremesinghe was given powers as Minister in charge of Finance to raise funds through the issuance of Treasury Bills guaranteed by the Government.
In 2021, the upper limit approved by Parliament for the issuance of Treasury bills was Rs 3,000 billion and the total value of Treasury bills due by the end of April 2022 was in the region of Rs. 2,860 billion.
<snip>
The debt ceiling for 2023 was stipulated as Rs 4979 billion . However, seven months into 2023, the government has decided to increase the debt ceiling by a whopping Rs 9000 billion.
This is a 280% increase in local debt for the year 2023. The economy contracted by 11.5% in the first Q of 2023. There have been no foreign debt repayments yet. Industrial growth declined by 32%. Then, the billion dollar question is, what is this extra Rs 9000 billion debt for ? The budget for the cancelled local government elections was only Rs 10 billion, and it was indefinitely postponed, citing a lack of funds . Speculation is rife that there will be a splurge of funds for vanity , eye candy projects before an election, which will put the country in another debt spiral, which a new government will have to bear the brunt of.
In Sri Lankan politics, there are no losers only winners . Losing an election is as good or even better than winning . In the run-up to the elections, those in power use government funds running into billions for election targeted projects from which tons of money is earned through kick backs and commissions.When the final results are announced, whether the result goes in their favour or not, matters little as the coffers have been emptied. Safe to say this whopping extra Rs 9000 billion is going to be wiped clean by Ranil Rajapaksa and his gang.
</snip>
From The Sunday Times, last week.
The Government is seeking parliamentary approval to increase the borrowing limit by as much as Rs 9,000 billion to finance public expenses through an amendment to the Appropriation Act.
The latest debt ceiling increase will enable the Government to cover debt service payments, recurring expenses, and welfare expenses through domestic borrowings since it lost access to the international market to raise funds.
A bill was ordered to be published by President Ranil Wickremesinghe on Wednesday in his capacity as Minister of Finance, Economic Stabilisation and National Policies to increase the debt ceiling from the current Rs 4,979 billion to Rs 13,979 billion.
Since Parliament is vested with powers regarding public finance, its approval is sought to increase service expenditure and capital expenditure of the Treasury operations by amending the Appropriation Act No. 43 of 2022.
The latest move to increase public expenditure came days after the Government had carried out a Domestic Debt Optimisation (DDO) initiative under an International Monetary Fund (IMF) programme to meet debt sustainability targets agreed upon with the global lender.
Last June, a resolution was passed in the House without a debate to increase the previous debt ceiling of Rs. 3000 billion by another Rs 1,000 billion under the Local Treasury Bills Ordinance. Then Prime Minister Wickremesinghe was given powers as Minister in charge of Finance to raise funds through the issuance of Treasury Bills guaranteed by the Government.
In 2021, the upper limit approved by Parliament for the issuance of Treasury bills was Rs 3,000 billion and the total value of Treasury bills due by the end of April 2022 was in the region of Rs. 2,860 billion.
