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Govt working on four options to revive economy - Minister

Cabinet Spokesman Mass Media Minister Dr. Bandula Gunawardena yesterday said that there are four options to recover from Sri Lanka’s worst economic crisis: increasing government revenue as much as possible, reducing government expenditure as much as possible, increasing the flow of foreign exchange into the country, and reducing the flow of foreign exchange out of the country.
He was speaking at the weekly Cabinet media briefing held yesterday at the Government Information Department. The Minister further said that the government is ready to accept any proposal based on these four options.

The minister said that next year the government’s recurrent expenditure will be Rs.4,637 billion and capital expenditure will be Rs.3,245 billion, thus the estimated total government expenditure will be Rs.7,885 billion. Considering the repeated expenditure for the year 2022, no matter how tax adjustments are made in the 2023 budget, only half of this can be earned, and this is the reality that the people of the country should accept, said the Minister.

Government employee salaries and pensions, subsidies paid by the government and interest payments for public debt will incur huge expenses, and no income has been generated in this country to cover such expenses, and there is a deficit in the current account every year, amounting to Rs.3245 billion.The minister said that the addition would create a big budget gap.

To cover this gap, after 1977, every government in the country took loans, and those loans taken domestically and abroad were continuously paid as loans and interest, and when they were unable to pay, they took more loans to pay off the loans taken, and under the prevailing Covid situation, the revenues were in short supply. The minister added that the loan could not be paid.

Dr. Gunawardena said that the multi-party debt payment is still going on, but the bilateral debt payment has been stopped, and discussions are being held regarding the suitable mine to pay it.

Minister Gunawardena said that it is not possible to reduce costs by stopping the payment of salaries to government employees, and it is not possible to save money by stopping development projects and reducing development costs.

The minister said that this year’s budget appropriation draft has been prepared by reducing capital expenditure as much as possible, capital expenditure is less than recurrent expenditure, government revenue receipts are less than recurrent expenditure, there is no political answer to economic collapse, there is only economic scientific answer.