Sri Lanka's new government on Saturday won the final vote on its 2016 budget with a more than two thirds majority, but a series of amendments due to public protests could derail the coalition government's fiscal consolidation attempts. The budget, which contains some long-term reforms and measures to boost revenue, was passed with 160 in favour and 51 against in the 225-member parliament.
The coalition government aims for a budget deficit of 5.9 percent of gross domestic product, after missing the 2015 goal of 4.4 percent. This year's budget deficit is expected to be 6 percent. The revisions to the 2016 budget could raise concern over Sri Lanka's efforts for fiscal consolidation as the government is expected to start negotiations next year for an IMF standby arrangement.
Finance Minister Ravi Karunanayake, presenting the amendments, said the amendments will result in a difference of 35.5 billion rupees ($247.78 million). The budget deficit is estimated at 740 billion rupees. "But there won't be any change in the budget deficit target as we will manage this difference by better financial management," Karunanayake told the parliament.
The amendments were made after trade unions and farmers protested against some long-term austerity measures. Some opposition members backing defeated leader Mahinda Rajapaksa, now a parliament member on the opposition benches, voted against the budget. Prime Minister Ranil Wickremesinghe's centre-right United National Party (UNP), the main partner in the coalition government, had to compromise with some revenue proposals at the request of its coalition partner, President Maithripala Sirisena's centre-left Sri Lanka Freedom Party (SLFP).
Comments
Comments are closed.