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Saturday Nov 23, 2024
Wednesday, 21 April 2021 00:26 - - {{hitsCtrl.values.hits}}
Cabinet has given approval to amend the Fiscal Management (Responsibility) Act No.3 of 2003, which sets fiscal goals for the Government, including debt and budget deficit targets for better public finance administration.
The Cabinet of Ministers gave the green light for Prime Minister Mahinda Rajapaksa to gazette the draft Bill and present the same to Parliament. Cabinet approval to change the Fiscal Management (Responsibility) Act was given on 21 December 2020 and Attorney General approval has already been given to the Bill, Cabinet spokesman Keheliya Rambukwella said.
The Government Fiscal Management (Responsibility) Act, No.3 of 2003 was passed, with a view to introducing Government Fiscal Targets as a guide to be followed to ensure a more responsible Government fiscal management.
The Act, at the time it was initially approved, aimed to reduce the gross Government debt to 85% of GDP by the year 2006 and reach 60% by 2013. It also expected to maintain the budget deficit at 5% of GDP.
However, as a result of the various internal and global impacts the Sri Lanka economy had to face, the numerical targets could not be achieved and as such, the said targets for 2013 and 2016 were revised by amending the Act. It was further amended following a Cabinet decision in October 2019.
The pandemic impact resulted in the fiscal deficit ballooning to 7.9%in 2020 according to the Finance Ministry. In 2021 the budget deficit is expected to be 8.9% of GDP as the economy works to recover from the pandemic and other challenges. The Government earlier said it would work to reduce the deficit to 4% by 2025.
