Supplementary estimate of Rs. 10,600 million to pay interest and loan floatation expenses

(October 21, Colombo, Sri Lanka Guardian) The government today presented a proposal to parliament seeking a supplementary estimate of Rs. 10,600 million for payment of interest and loan floatation expenses saying government revenue anticipated since January 2009 up to now has dropped by Rs. 133 billion.

In explaining the purpose of the supplementary estimate the government said it is difficult to control the expenditure corresponding to the shortfall in revenue owing to increase in the difference in expenditure during the first five months of the year, giving priority for tasks such as providing relief to IDPs, implementation of resettlement programmes and inability to differ payments such as salaries, pensions, fertilizer subsidies, Samurdi and loan repayments.

A statement issued by the Minister of Finance and Planning, President Mahinda Rajapaksa said that as a result the overdraft balances of the two state banks that prevailed at the beginning of the year, have been gradually increasing during the year. Accordingly, the banks have charged and debited the Deputy Secretary to the Treasury (DST) account with a sum of Rs. 5145 million as overdraft interest for the period ended August 2009.

The money from the supplementary estimate will be used to pay the interest on the bank overdrafts which amount to Rs. 9400 million. In addition this will also be utilised to pay the insurance premium and management exposure fees that had to be incurred on development projects such as the Colombo Kattunayake Express way and construction of the Hambantota Port.

-Sri Lanka Guardian