Firm stance on impactful use of funds - Treasury Secretary | Daily News

Firm stance on impactful use of funds - Treasury Secretary

Treasury Secretary S R Attygalle hailed new Finance Minister Basil Rajapaksa for creating a firm stance with his budget expecting line ministries to use funds in the most impactful manner possible.

Attygalle went on to justify the surcharge tax given the costs incurred on the COVID-19 vaccine rollout and highlighted that with the return of tourism revenues the country should regain a comfortable situation in the next 12-18 months.

Attygalle noted that the budget deficit would be around 8.8% in 2022. Attygalle was speaking on November 27 at a Centre for Banking Studies webinar on the recent budget. Attygalle highlighted that the budget aimed to create a strengthened external position, shift towards manufacturing base investments, support vulnerable groups in a targeted manner, and strengthen the fiscal position. Attygalle acknowledged the vital role Samurdhi played in providing support to vulnerable groups but defended the proposed reform mechanisms. He said, “We are aware of the cost-of-living prices going up, mainly due to external factors, but we have identified it. We have noted targeted support for which a sizable amount of funds has been allocated. The most vulnerable groups will be supported.”

The budget shall continue to implement the piped water provision for all citizens of Sri Lanka that is at the core of the current government’s manifesto. The government will look to create non-debt by creating foreign inflows. The government over the short term shall look to divest underutilised assets to foreign investors. The country will also look to securitise the inflows of future foreign remittances.

CBSL Governor Ajith Nivard Cabraal noted that they expect GDP growth to be 6% in 2022 given the low base effect and the high rates of recovery. The calculation of a 6% figure is based on the assumption that the tourism sector will perform at a quarter of its full potential. Cabraal cited the conversation surrounding debt management as being pedantic. Cabraal criticised popular talking heads in the opposition as being frivolous in their usage of the term restructuring. Cabraal noted that debt would in the normal course of business be rearranged to suit the borrower. He highlighted that it was normal practice for a borrower to change between sources of credit, to obtain credit at different costs and tenures, and to look to localise as much debt as possible.

Cabraal was of the view that future financing needs could be met through government-to-government loans further assisted by Central Bank swaps. Cabraal was highly critical of the International Sovereign Bonds issued in the past.

 


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