Verité Research conducted a forum on ” Improving National Budget Practices: Solutions for a Professional Government” on the 27th of February 2020 at Hilton Colombo. At this forum Verité Research discussed how the government can improve its budget process through better formulation, implementation and controls which will lead to effective and efficient management of public finance.
Analysis of past budgets reveal large deviations between budgeted allocations and actual expenditure. This shows that expectations set by the government during the budget speech are not honoured. This Insight analyses budgeting on social services and the rural economy to demonstrate the extent of deviations in promised allocations and actual expenditure. Results suggest that when precise expenditure is not tangible, it is easier to renege on budget promises.
Taxes are the key source of government revenue. Normally, tax share as a percentage of GDP is expected to increase as per capita GDP rises. This Insight shows that in Sri Lanka, this is not the case; the country’s per capita GDP has been rising but the tax to GDP ratio has been falling. Sri Lanka needs to improve its tax revenue to ensure that the government has enough money to spend towards welfare and growth while not running the risks of high budget deficits and debt levels. The example of Georgia in the last decade points to a significant opportunity to reverse this puzzling and strangling trend.
Sri Lanka Budget 2013 : Increasing Assistance and Vulnerability presents an analysis of the contradictory nature of the Budget 2013 through increased assistance to the poor, while at the same time increasing their vulnerability. The analysis of Budget 2013, rather than reiterating the general criticisms reported in the press, presents an in-depth analysis of how the Budget 2013 actually represents a retreat from the welfare state and the impact of the ever increasing defense budget. It further addresses the viability of the measures introduced for the assistance of Small and Medium Enterprises (SMEs), the extent of executive domination of the Budget, the inconsistency of the Budget with the Constitution and the feasibility of the macroeconomic targets set in this Budget.
The report summarises Sri Lanka’s macroeconomic environment, analysing the 2012 budget and providing a comparative study of government expenditure. It finds that the focus of government expenditure has shifted from funding welfare activities to funding infrastructure projects. It also considers the amount of government budget allocated under the executive presidency, inconsistencies in taxation policy and a summary of government expenditure and revenue.